Investment Case

DAMAC Properties Investment Case

DAMAC Properties’ management believes the Company offers investors the opportunity to participate in the future growth of a leading luxury property developer in Dubai and the Middle East.

The Company has a proven track record of delivery through all market cycles, having delivered 8,887 units across over 9.0 million square feet since launching its first residential development in 2002, with a total project value of US$3.0 billion. As at 30 June 2013 DAMAC Properties had 21,075 units comprising 25.8 million square feet of saleable area in progress across the Middle East, all of which are scheduled to be delivered by the end of 2017.

DAMAC Properties intends for investors to benefit from attractive returns, driven by strong financial results and enhanced margins resulting from the Company’s full development phase business model.

The Company also intends to target a payout ratio of between 30 per cent to 50 per cent of its distributable earnings. The Company aims to maintain a progressive dividend policy thereafter, but reserves the flexibility to amend the policy going forward depending on market conditions.

Geographic expansion, across key target markets in the Middle East, alongside product innovation, such as co-branded developments with premium brands, ensure that the Company is well positioned for future growth.

Investment highlights:

• Internationally recognised brand
• Leading growth of the premium Dubai property market and beyond
• Proven business model with strong margins and attractive returns
• Advanced in-house design, sales and project execution as well as service and hospitality capabilities
• Future growth secured by existing development pipeline and ability to source new opportunities
• Prudent debt free strategy with fully-paid land bank
• Highly experienced management team and a committed founding shareholder

Internationally recognised brand and leading independent property developer in Dubai

DAMAC Properties’ strong reputation and internationally recognised brand is based on its track record of delivering high quality, luxury developments, such as Park Towers, Ocean Heights and Marina Terrace in Dubai. The Company believes that its strong position and its strong brand translates into higher sales volumes, which also enables DAMAC Properties to achieve higher profit margins than many of its competitors typically achieve.

Leading growth in the premium segment of the Dubai property market and beyond

Dubai exhibits strong economic growth across a number of key sectors, with 4.7 per cent GDP growth in the second quarter of 2013, according to the Dubai Statistics Centre. Alongside the emirate’s strong growth prospects, the region is also seeing an increased influx of expatriates and an increase in foreign investment, a rising population and growth in tourism, further driving demand for prime residential property.

DAMAC Properties is therefore well positioned to continue to play a leading role in the further development of the Dubai real estate market as the sector witnesses a cyclical recovery on the back of rising demand, renewed investor confidence and improved economic fundamentals.

Proven business model with strong profit margin generation and attractive returns

A strong commitment to maximising profit margins and returns on equity shapes DAMAC Properties’ planning and decision-making processes. The Company believes it achieves higher profit margins and high returns on equity through:

• Aggressive project cost management
• Land acquisitions in prime locations at good value
• Active capital management
• Speed of execution
• Sophisticated and proactive sales and marketing teams

Advanced in-house design, sales, execution, service and hospitality capabilities

Key to DAMAC Properties’ financial success is its ability to generate strong sales on units in a project from launch. The Company has a number of dedicated in-house teams, including Sales and Marketing, Design, Project Management, Customer Relationship Management and Acquisitions, which are instrumental in every step of the design, construction and sales process.

Future growth secured by existing development pipeline and ability to source new opportunities

DAMAC Properties has a high-quality, well-located pipeline of in-progress developments which will drive near-term growth, both within the UAE and internationally. As at 30 June 2013, the Company had approximately 21,075 units under construction equating to 25.8 million square feet of saleable area in six different countries, with scheduled completion dates to the end of 2017. In addition, DAMAC Properties’ expansion into branded apartments and serviced apartments is intended to enhance its future growth, with top associations with internationally recognised brands such as Versace Home, FENDI Casa, Paramount and Trump.

Prudent debt free strategy with fully-paid land

Part of DAMAC Properties’ conservative business model, of paying the majority of construction costs from instalment payments received on sales of units, allows it to operate at low levels of leverage and meaningfully de-risks the Company’s pipeline. DAMAC Properties’ conservative and flexible capital structure alongside management’s agility also enables it to respond quickly to changes in the economic cycle.

Highly experienced management team and a committed shareholder

The Company is led by a management team of directors and senior managers with significant experience in the real estate construction industry, as well as in marketing, human resource management, company administration, corporate finance, legal and accounting. The Board draws its knowledge and skills from both local and international experience.