Maintain a manageable portfolio and sell it fast. That is how Rizwan Sajan spells out his real estate development strategy to the uninitiated. “You need to create trust with the consumer,” says Sajan, founder and chairman of Danube Group. “That is the reason I don’t build many projects at one time. I want to go one project at a time. When I’m sure I’ve sold 70-80 per cent of the project, I’ll go for another one.”
Now with 10 projects under his belt, including two that have been fully delivered, the construction supplier-turned-real estate developer says he will continue his conservative approach to property development, although interestingly such restraint has given him greater flexibility on the one element that truly matters to his customers — price.
Rizwan Sajan
Sajan earned instant success with the 1 per cent per month payment scheme he introduced when he broke into the real estate development scene in 2014. While bringing down prices can be a dangerous strategy for smaller developers, the key, he says, is to be able to operate with a “small margin” and, more importantly, to be able to sell fast.
“Yeah, it is a sustainable [business model] as long as you are able to sell it fast,” he tells PW.
Atif Rahman, director and partner of Danube Properties, the group’s real estate development arm, further elaborates: “It’s very simple: we launch a project, sell it, start construction, go on to the next one. That has always helped us remain very less leveraged and committed to our existing projects.”
And with the launch of Danube’s latest development, Jewelz, which is located in a planned park in Arjan, Sajan has further tweaked the payment scheme, making the initial outlay even more accessible to his market base — a strategic move that goes along with a manifest upgrade in the luxury quotient of the project.
Atif Rahman
“The payment plan is much, much better and more affordable,” he says. Under the new scheme, buyers will pay the usual 10 per cent down payment, followed by 1 per cent per month for five months, 5 per cent on the sixth month, 1 per cent per month for another five months and then 5 per cent on the 12th month. The original scheme required buyers to shell out up to 30 per cent within the first three months before the 1 per cent monthly instalment kicks in.
The Dh300-million Jewelz project, which is set for delivery in March 2020, offers 463 fully furnished apartments, with prices starting from Dh468,000 for a studio and up to Dh1.12 million for a two-bedroom apartment. Jewelz will also include amenities such as a health club, party hall, sauna room, swimming pool, jogging track, badminton court, paddle tennis court and a barbecue area.
“If you look at Jewelz, starting from the location of the property to the design, amenities and the price, I think everything is just right,” says Rahman. “I’m confident it should sell out in quick time.”
While maintaining a balance between luxury and affordability can be a challenge, Sajan says he remains committed to his chosen niche. “I tried [the high-end market] with Bayz, which is also very good, but it took me a little longer time to sell that project,” says Sajan, referring to the Bayz project in Business Bay, where launch prices started at around Dh650,000 for a studio. “But I would rather focus on my strength in the affordable section.”
While it has built its fame around its market base of end users, Danube has now made a more conspicuous thrust towards the investor market, claiming that Jewelz could generate gross returns of up to 15 per cent.
“When you buy a studio, by the time I hand over the project, you are paying me only Dh215,000,” says Sajan. “If you check rental prices in Arjan, a studio is approximately Dh45,000-Dh48,000 and that is unfurnished. Here I’m offering you a fully furnished apartment and on a Dh215,000 investment, you start earning Dh45,000 monthly, which is almost a 20 per cent return — it’s not even just 15 per cent.”
