Dubai firm eyes European, U.S. real estate foray

By Daliah Merzaban

DUBAI (Reuters) - Dubai-based Damac Properties said on Monday it was considering expansion into Europe and the United States as part of plans to develop a global luxury property brand.

"When you talk about a sports car you talk about Ferrari or Lamborghini ... that is what we are targeting. That is what we want to be for real estate," Damac Chairman Hussain Sajwani told the Reuters Middle East Investment Summit in Dubai.

Damac, which has 60 projects in the Middle East worth about 100 billion dirhams ($27.2 billion), wants to acquire existing real estate firms and develop land it buys on the east coast of the United States and in Europe, Chairman Hussain Sajwani said.

"We're looking very aggressively at these markets," he added.

Damac had a team in Europe last week to "study the market", and had been in negotiations for a plot of land in one European city which fell through last month, he said.

Returns are higher in the West than they are in Middle East real estate, Sajwani said.

The Burj Dubai skyscraper, billed by its developer as the world's tallest building, sells each square foot for 2,400 UAE dirhams ($653.6), compared with 4,000 pounds ($7,844) for a square foot of prime real estate in London, Sajwani said.

"There is more to be made in the Western world than in the Middle East," said Sajwani, whose company made sales of about 15 billion dirhams since starting in 2003, and expects sales to double this year over last.

Gulf Arab property developers are expanding outside of Dubai, the Arab world's commercial hub, which kicked off rapid growth in real estate prices in 2002 by allowing foreigners to invest in property.

Partly state-owned Emaar Properties EMAR.DU, the Arab world's largest property developer by market value, bought U.S. homebuilder John Laing Homes last June as part of its expansion strategy.

Sajwani shrugged off concerns the U.S. housing market is slowing, as foreclosures rise among so-called sub-prime mortgage borrowers.

"We are actively looking at North America. In one way it might not be the right time to develop the property but it may be the right time to buy a piece of land or acquire a company," he said.

Damac, which also plans to launch real estate developments in Morocco, Tunisia, Pakistan, India and Turkey, plans to unveil a new luxury residential brand next month that will roll out 12 apartments in seven years in the region and abroad, he said.

"These apartments will be ultimate luxury. They will be the most expensive in the Middle East," Sajwani said.

Privately held Damac's biggest project is a $16 billion tourism project on Egypt's Red Sea coast, which the firm will begin developing this year after receiving the 320 million square feet of land from the Egyptian government a week ago, he said.  Continued...