Property: Damac ‘proud’ doing business with Trump

Damac Properties Dubai Co., which opened a Trump-branded golf course in Dubai last month, said it’s “proud” to be doing business with the Trump Organization.

“We’re very proud of that partnership. It adds value to us,” Chief Financial Officer Adil Mohammed Hassan Taqi said in an interview with Bloomberg TV on Tuesday. “With President Trump coming into office, what they can and cannot do will be a decision for the Trump Organization.”

Taqi’s comments come a day after Trump signed a revised order restricting entry into the U.S. by people from six predominantly Muslim countries. Trump replaced his Jan. 27 order by dropping Iraq from the list of countries whose citizens are barred from entering the U.S. for 90 days. While the revised order halts admissions of refugees for 120 days, it no longer bans Syrian refugees indefinitely and doesn’t favor Christians.

Trump’s adult sons Eric and Donald Jr., who now manage his sprawling business empire, were guests of honor at the launch of a new luxury golf course in Dubai in February, the first opening of a Trump-branded property since Inauguration Day.

Second Trump Resort

Damac has a second resort under development, the Trump World Golf Club Dubai, which is being designed by golfer Tiger Woods. The developer paid Trump as much as $10 million in 2015 and the first part of 2016, according to his financial disclosure filed in May.

As president-elect, Trump said he turned down a $2 billion deal with a major property developer in Dubai because he didn’t “want to take advantage of something.” Damac confirmed the talks with Trump, without specifying whether the deal involved properties in Dubai or when the discussions took place.

New Partnerships

Damac is also looking for new partnerships with premium brands to attract buyers as home sales remain flat in Dubai this year, Taqi said. The developer already has partnerships with Bugatti Automobiles SAS, Italian fashion house Gianni Versace SpA and Paramount Pictures Corp.

Damac expects sales of about 7 billion dirhams ($1.9 billion) this year as it delivers 2,800 homes, slightly lower than the 7.2 billion dirhams reported in 2016. The developer’s operating profit will come under “slight pressure,” while gross margins are expected to drop to 50 percent in the long term from 56 percent last year, Taqi said.

“The development business is cyclical and what you cannot do is wish cyclicality away, but what we can do is prepare,” he said. “What gets worrying in real estate is when prices go up very quickly in a very short period of time.”