London property talks lift Damac share price



Shares in Damac rose more than 8 per cent in trading yesterday after the developer said it was in talks to enter the London real estate market.

Damac shares registered their biggest jump since February 15 to close at Dh2.42 after Dubai’s second-largest listed developer said that it was considering buying an equity stake in a project to build a 50-storey apartment-led tower in central London.

The developer said it was considering making the investment after a company under the control of the Damac majority shareholder Hussain Sajwani exchanged contracts to buy a plot of land in the UK capital, where planning consent had already been granted for a 685,000 square feet residential tower.

In a statement to the Dubai Financial Market, Damac said that Mr Sajwani, who owns 79.44 per cent of Damac, expected to complete the land transaction with an unnamed seller “shortly”.

Damac said that the proposed project would comprise 450 apartments and almost 35,700 sq ft of shops.

If it goes ahead with its plan to purchase the equity stake, the move would mark Damac’s entry into the high-profile British housing market.

“Damac’s expansion strategy is to target international markets that are customer-led and where the company has existing equity with customers who would be interested in these markets,” Damac said in its bourse statement.

“Damac is continuously looking at global opportunities where the Damac brand can add value and these are evaluated on a case-by-case basis,” it added.

According to the latest figures from the building society Nationwide, average annual house price rises in London slowed during the first quarter of 2015 to 12.7 per cent, down from 17.8 per cent in the final quarter of 2014.

The unnamed project Damac is looking at shares a number of key similarities with a high-profile plan by McLaren Property and Citygrove to build the New Bondway tower in Vauxhall, SW8.

According to the two developers, the proposed development in zone 1, known locally as the “Jenga tower” because of its block-like appearance, would comprise 450 apartments, a private gym, cinema and winter gardens as well as shops and offices. It is anticipated that the development will have an end value of £350 million (Dh1.91 billion). Planning consent was granted in August 2014.

A Damac spokesman declined to comment further on the London project.

Damac began trading on the London Stock Exchange in December 2013 before moving to the DFM at the start of 2015. It already has projects in the UAE, Qatar, Saudi Arabia, Jordan and Lebanon.

lbarnard@thenational.ae

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