Damac Properties — SME Case Study (UAE)

Damac Properties is one of the leading Emirati property development firms that has been listed historically on the financial market in 2015. The firm has been leading on residential, commercial, and leisure products, or the properties that have been integrated in different countries such as Saudi Arabia, UAE, and Qatar, as well as in Jordan and Lebanon and also in Oman and majorly in Europe, specifically the United Kingdom.

Historically, the company started back in 2002 and was formed by Hussain Sajwani, the founder, owner, and the chairman of Damac in real estate. The firm has been operating with leadership, integrity leading with successful projects with different areas in the UAE, as it Damac Properties has moved towards building long term projects, bigger contracts, and also development portfolios up to 1.5 billion. This has shown its competitive strength in the industry to be among the major firms that have not just been in the image, but also in the recognition that it has gained in trusted long-term relationships with clients.

It deals with customers with the highest quality in commercial and also leisure, including customer service, integrity with clients, customers, and stakeholders, as well as driving quality products and services that can bring a long-term approach for the company.

In terms of its vision, Damac brings quality in customers relationships, leading with luxury product and commercial developments with the highest customer service, and provides customers with dreams of iconic residentials.

4,700 UNITS DELIVERED 4.4 BILLION DIRHAMS TOTAL REVENUE 3.1 BILLION DIRHAMS SALES BOOKED Figure 58: The numbers of Damac Properties as of today

Organizational Structure

Top Management

CEO/ Managing Directors/ Head departments (HR- Finance, IT & R&D, MKT) SALES TEAM/ Construction Project managers CRM: Customer Relationship Management R&D Team Auditors Figure 59: The organizational structure of Damac Properties The organization uses a functional and hierarchical structure, however, the reporting comes from the CEO objectives, goals, and strategies that are set.

Secondly, top management makes the decision on integrating work to be efficient based on the projects and integrate on long-term goals, producing the property development and then working on selling it.

The reporting team also works with the internal and the external auditors, who constantly keep on working if the organization is meeting the standards, keeping with the laws, regulations and also the challenges on where to improve, what to improve, and how to improve. The type of organization also functions through remote and also through different forms where sometimes, an HR manager is as equal to the normal employee, and the normal employee who works in CRM has an influence on the decision making.

Leadership The leadership team consists from the top, the founder Hussain Sajwani, and the board of directors as Farooq Arjonand, Sofiyan Khatib, Yahya Nooridin, and Ali Mal Allah Binjab.

NOMINATION & RENUMERATION COMMITTEE The Board of Directors has constituted a committee of the Board known as the Nomination & Renumiration Committee (N&R Committee). The N&R Committee met once during 2019

and it comprises the following Board Members

SN NAME ROLE CAPACITY 1.

Farooq Arjomand Chairman Non-Executive / Independent Director 2.

Nabil Alyousuf Member Non-Executive / Independent Director 3.

Yayya Nooruddin Member Non-Executive / Independent Director Figure 60: A look at Damac’s Board of Directors

The restructuring has been in the following format, which is a focus on business planning, while determined to look into continuing projects by creating the least impact on ongoing projects because that is where it has losses. This is majorly due to the pandemic, where restructuring has been an important aspect. It has looked into changing its way of functioning not just on the daily basis, but also on quarterly projects on what it should do and how to follow it. The online working procedure included the below diagram in functioning and it has been in action since 2019.

Figure 61: Damac’s working order In order to change the way the pandemic has stopped its work, the company had to restructure firing workers, and also stop major projects. These projects also included risk assessments, daily environmental inspection and also implementation of pandemic safety procedures at the office, including the work areas that did not involve the aspects of running the business. The main thing that also was included was receiving cash back, keeping the mentality of the cash cow strategy from these clients which already purchased and delayed their annual payments in different aspects due to the pandemic.

The company’s projects include the following

• Damac 9 Towers in London
• Akoya project
• Mina Sultan Qaboos
• Ghalia project
• Dubai Business Bay
• Hospitality section in Damac Hills and Resorts,

Damac Water Canal, and also Distinction

• Dubai Mall Street
• Damac Hills and Damac Heights

Damac Properties Strategies

The business strategies included

• Cross selling more properties, renting, and leasing
• Creating the most innovative and quality based

properties

• Differentiation settings in the quality of houses

The operational strategies included

• Enhancing the performance on a daily basis with

customers

• Delivering projects efficiently and handling delays

of the projects

• Automation of the work implement effective

systems to use during the pandemic

• Enhancing supply chain and information technology

during the pandemic

• Reducing costs and increasing cash returns, ROIs,

and ROEs

The marketing strategies included

• Email marketing
• Direct selling
• Co-branding Damac and conversational marketing
• TV/paid media advertising

These strategies change according to Damac Properties, however, the set information was based on the pandemic up until Jan. 2021, which has been a major influence of change on Damac Properties.

Some of the major problems and challenges that the company has faced was the financial crisis, stock market prices, and the assets that it faced and the construction projects, which were also major aspects that influenced the business.

The legal issues faced by the firm were the legal obligations following the pandemic rules and regulations in the office, and reducing the spread of COVID-19. This has been a legal issue that it faced and impacted the construction of projects as far as delays, loss of millions per day, and the clients, who were dealing with these.

Dissatisfaction has occurred due to unplanned events that were discussed by the company on these matters.

Despite this, the ending consolidated financial position of the firm in 2019 was closer in comparison to 2018’s total equity and liabilities. However, this does not justify the loss but it provides an evidence base.

Figure 62: A look at the overall assets of Damac Properties over the years In the past, the firm has operated on ongoing heavy projects that were planned during 2020 in order to create bigger projects by 2021, that would go with the UAE vision on EXPO2020.

It has built 50 projects and is in the process of building.

In the six countries, the history keeps it in good shape, and also the revenue of 2019 was 4.4 billion, the sales increase and the employees as well.

Based on the perspectives of history, the firm can proceed with future projects with goals that can help to achieve long-term basis and approach to operating on the successful business practices with leadership and vision.

Figure 63: Overview of Damac’s history and present Company as of Today Figure 64: The company as of today Business Practices and Overcoming Challenges The business is operating on the international and local and regional basis. In order to overcome challenges, the firm has to decrease its costs and also increase the efficiency in the market and also lead with its vision on the major regional and international standards.

In order to gain reputation and more clients, it has to progress towards the ISO 9000 standards, and also perspectives on being successful in not just the construction projects delivery, but also the establishment of new areas.

The business practices adapted can help to evaluate its performances and can conduct more audit procedures, keep records, and also compare them, which can keep it on track with pandemic rules, international standards, and the quality assurance that it wants to deliver in its projects.

In recommendations, the firm can improve its current financial position, develop in new markets and also lead with the international standards of ISO 9000 and other health and safety regulations that include project management aspects.

In regards to customer service, it has to improve its quality assurance and also the relationship that it has with customers in the long-term. It has to create a safe environment during COVID-19, enhance the performance of the business, and develop better HR strategies to find the right employees instead of hiring and firing, which it has been doing for the last six months. These procedures have been hard on the company with losing money and time, and also clients and effort. These cannot be tolerated because a business like this does require focusing, evaluating and also looking at on a daily basis.

Lesson Learned/Conclusion The lesson learned is that a pandemic can always be there, but technology is the thing that can change the future of the company. Also the quality of the work can change, and major projects can be shut down due to the pandemic, and it can cost a lot to the company.

Furthermore, the lack of leadership abilities in certain areas and reviews can have an impact.

In conclusion, Damac Properties has been one of the leading firms that has always developed its strategies and cooperated with main achievements and goals that have led it to operate under chairman Hussain Sajwani.

With the vision and mission, the firm can approach international standards and international markets with product and market development strategies that can lead to international scope and growth. The firm did get impacted by COVID-19, and major projects were delayed in construction. The firm also suffered issues in the financial crisis and also project planning. With the growth and the development aspects, the firm with its auditing efforts have combat the issues related to the legal, financial, and economical problems during 2020, yet there is a lot to be recovered, and more investments were made in order to keep the business on high-end profit making.

Case Study Questions

• How can the case study be improved by including

more internal data instead of figures?

• What are the weaknesses that are found at Damac

Properties during the pandemic?

• How can this case study enhance, find the gap, and

analyze the major key performances of Damac?

• Can this case study provide significant information

that can be used in the auditing process in the future?

• How can the case study evaluate and enhance those

gaps that can improve daily operations and business strategies?

• What level of organization strategies must be changed

and what actions to be taken immediately in order to keep better performance?