Danube Properties chief Atif Rahman discusses cash flow and risk management in Covid-19
The coronavirus pandemic has brought about unprecedented challenges for businesses around the world. Dubai property developer Danube Properties was also faced with material delivery delays, slowing down work in the sites, especially those in advanced stage of construction. In an interview with Gulf News, Property Weekly, Atif Rahman, director and partner at Danube Properties took several swift decisions to ensure that the impact of the crisis was managed in an effective and timely manner.
What has been the biggest lesson from the pandemic?
The pandemic has reinforced the basic principles of business stronger than even before. The importance of efficient cashflow management, controlled leveraging and risk management through swift decisions are some of the important elements to keep a business in sound financial health. Like I have mentioned before, it wasn’t exactly raining dollars prior to the Covid-19 outbreak. In my opinion, most businesses have been experiencing a slowdown probably since 2018, hence we cannot blame the pandemic entirely for a business failure, except that it did lead to a further slowdown.
The pandemic has shifted the focus to healthcare and hygiene, which I think was being ignored. I felt the pandemic or the fight against it, was as much about immunity as it was about protection and sanitisation. The immunity is directly linked to the health of an individual. In line with that, while we prepared a top-of-the-line sanitisation infrastructure, we also created a Wellness Centre in our Head Office to achieve a better score card for all of our employees’ health. This also has direct impact on the business with dramatic improvement on staff availability and their efficiency.
What have been the key challenges of 2020?
It’s been brilliant. Yes, we faced challenges in operating a business during the lockdown, but we continued mitigating those challenges. Almost all of the finishing materials are imported from our overseas factories, hence the material deliveries were delayed, slowing down our sites specially those in advanced stage of construction. Due to the global lockdown, all the factories were first shut down and then working at below capacity, which further escalated the problem. I am thankful to have the most dedicated staff and supportive contractors which has helped us manage the challenges efficiently. We continue to eliminate all impacts arising from Covid-19 at our sites which is the most important obligation for us.
What steps did you take to ensure that Danube Properties survived these challenges?
We have done nothing different in our business operations and we consider the pandemic as an opportunity. Keeping our business consolidated and carrying reasonable expectations has always remained at the top of our business priority. Such an approach ensures minimal impact on the business in challenging times. It reduces the recovery period and we are able to put more effort to take the business forward. The employees are the biggest strength of any organisation; we have ensured they remain happy and empowered during this challenging time and they have reciprocated equally to keep our business strong during these testing times. One of the key factors that defines the strength of any business is adaptability without changing the business principles; we are fortunate to be one.
Your forecast for 2021? What does the market need right now?
The UAE will continue to attract more global attention and investments. The manner in which the pandemic was handled in UAE is phenomenal to say the least. There have been some dramatic improvements made to the immigration laws which will further incentivise people for considering the UAE as their permanent base. The Expo 2020 Dubai is going to be even bigger event than it originally was next year. It’s the single largest such event which the entire world will be looking forward to.
In terms of market requirements, I believe we need to relook at regulations and also a greater support of the banking sector. The soft infrastructure should prioritise survival and then security. Coupled with the impact of pandemic, businesses can succumb if regulations remain too stringent. We need to align to the global standards, regulation are relaxed and cash is made more easily available when the markets dip. The idea is to help businesses survive the fatal impact of pandemic and in return the eco-system will remain preserved. I can see some great performance in the real estate sector if these two matters are attended swiftly and intelligently.
The question of affordability has taken on a different dimension in 2020 with jobs lost, and economic challenges. What iwould a post pandemic buyer want?
As far as affordability is concerned, Dubai, like any other developed city, will continue to feel the pressure of increased cost of living which actually demonstrates the economic growth of the city. So, it becomes extremely important to deliver affordable real estate solutions which is an absolute necessity today. Not only do real estate investments benefit the sector, but it also further boosts population and income retention within the country. Increased domestic consumption and local investments directly impact the growth in GDP.
The Dubai real estate industry is very attractively placed with robust soft and hard infrastructure. I see some great potential and opportunities in creative real estate solutions. We need to evolve the way we design, sell, build and maintain our real estate. Proactive intervention and innovation will further cement our position regionally and globally. There is also great opportunity in creating local infrastructure for manufacturing construction material. Specialised industry development zones with initial subsidy will make us more self-reliant while also contributing to the local economy.
What will be Danube’s offerings in 2021?
As a developer, we have always remained focused on project delivery. In 2021, we plan to deliver at least four projects across different parts of the city comprising 1836 units. We are also working aggressively on the drawing board to create even more cost effective and innovative living solutions. To sum it up, you will continue to see greater value at more affordable prices in our future real estate offerings.