Damac Properties signs US$300 mln deal with Russia
International Update – Real Estate JVs
Middle East’s largest private developer Damac Properties is investing $300 million in a real estate joint venture with Russia, as the property giant pursues aggressive expansion plans further east. Damac reached an agreement with Russia’s Prominvest, which will invest in real estate projects, including the facilities for the 2014 Winter Olympic Games in the Black Sea resort city of Sochi. The Joint Venture agreement signing between Mikhail Shelkov, the chief executive of Prominvest, left, and Hussain Sajwani, Chairman of DAMAC Properties was overseen by Russian Prime Minister Vladimir Putin.
"Damac Properties as the largest private luxury developer in the Middle East, is well capitalised and focused on expansion in the CIS countries and in the Far East. We are expanding further east and are investigating and evaluating investment opportunities further afield” said Hussain Sajwani, Chairman of Damac Properties. "This deal signals a vote of confidence in the global economic recovery, and that Damac is well positioned to ride the upswing as we look to Asia and the subcontinent for future growth."
The deal in Russia follows a shift in the country’s new foreign policy doctrine, which calls for domestic companies to expand cooperation with the Arab world to foster pragmatic, business-oriented relations to lure investment and expertise that can help modernize the economy.
"Damac has a proven track record of developing and delivering luxury property developments across the Arab world, and now we are now taking that wealth of experience and expertise to Russia and the Far East” said Mr Sajwani. ‘’This joint venture with Russia presented us an opportunity to enter into a market with great potential and a strong regulatory and transparency framework. I commended the Russian authorities for all their assistance in establishing this joint venture.”
Damac is currently developing luxury projects across the Middle East with developments in the UAE, Qatar, Lebanon, Jordan, Egypt and Saudi Arabia. Damac has formed an exclusive partnership with Versace Home for its high-end development ‘Damac Tower’ in Lebanon. "Damac is cementing its position as one of the biggest and most trusted luxury developers in the world. We have a reputation for superior quality projects, and acute attention to detail. Our association with Versace is testament to our commitment to delivering a designer lifestyle to our customers." said Mr Sajwani. The 28 storey luxury residential address is at the exclusive Solidere development, and will have sweeping ocean views across the Mediterranean.
The joint venture with Prominvest marks the developer’s entry into Russia. Prominvest is a subsidiary of State Corporation Russian Technologies, which is the biggest industrial holding in Russia with a monopoly on strategic markets. With over 700 subsidiaries Russian Technologies is involved in every aspect of the day-to-day business in Russia. Prominvest, the investment arm of Russian Technologies, plays an active role in the establishment and management of assets and, in future, holdings of the corporation. It is responsible for implementation of its parent company’s investment policy.
"Damac is confident that aligning our expertise and know-how in property development, with Russia’s biggest industrial holding will meet Russia’s need for quality property developments in the short to medium term, and potentially lead to further investment opportunities in the future," concluded Sajwani.
The Russian shareholding of the joint venture with DAMAC will be 51% of shares. The fund will invest in development projects, with preference given to residential construction projects, the first being in Moscow. Damac Properties is making good progress on all its current projects, having delivered over 3,600 units so far and will be delivering more than 3,971 units across the gulf region over the next 12 months.
The Joint Venture agreement signing between Mikhail Shelkov , the chief executive of Prominvest, left, and Hussain Sajwani, Chairman of DAMAC Properties was overseen by Russian Prime Minister Vladimir Putin.