With the revolutionary game-changing 1 percent plan, Rizwan Sajan, chairman and founder of Danube Group, has transformed Dubai’s property sector not only by simplifying the buying process but also by accelerating the shift from renting to ownership in the city.
A planned entry into properties
Despite the Dubai property boom that occurred between 2004 and 2007, Rizwan Sajan, chairman and founder of Danube Group, was a late entrant to the sector and witnessed the market going crazy with people standing in queues to buy.
“Many people advised I join the property sector since my building materials business was flourishing, but at that time, I found the market to be unbelievably crazy and ultimately, many people had gotten carried away with that boom and left the country,” he says.
Then came a time when things started settling down and Dubai won the Expo 2020 bid, followed by the development of the Escrow Account law, which Sajan says was a core pivot for both the investors and developers in Dubai.
To address the issue of speculative flipping and prevent an unrealistic property boom, the Dubai government implemented escrow accounts in its new real estate sector. Escrow accounts securely hold funds during transactions, discouraging short-term buying and selling and promoting stability and transparency in the market.
Sajan explains, “Earlier, the developer would announce a project on paper and collect the money from the investors; rather than depositing those funds into the bank for the project’s construction, they would purchase more plots to launch additional projects.” To ensure construction commitments and financial security, the Dubai government introduced a regulation mandating developer to provide a significant guarantee.
As per the rule, developers must deposit the funds into an escrow account regardless of unit sales. This measure aims to promote transparency, safeguard buyer investments, and guarantee the completion of construction projects in Dubai’s real estate sector. “This stabilised the market and the unwanted people who were borrowing money to enter the business left, leaving only genuine investors in the business.”
The ingenious new one percent plan
By the time Sajan entered the property sector, there were already multiple big players established in the sector. “While we were doing fantastically in building materials, in real estate, I knew we had to come up with something special to compete because we realised that 80 to 90 percent of expats were still renting, and I wanted to convert them into buying their own properties,” he explains. “This is how I came up with the one percent plan.”
Shifting the mindset of expats who had rented in Dubai wasn’t easy, he says, because most of these individuals were salaried individuals. “Most expats in the UAE have lived here at least four to five years and have accumulated some savings, but not enough to purchase a property for themselves,” he tells.
“After brainstorming, we devised the one percent plan whereby in addition to a small down payment, the monthly payment was set at just one percent per month with the balance collected once the building was ready.”
According to Sajan, this instantly became a super hit and helped steer his successful foray into the affordable market. “We came out with super competitive prices which anybody could afford with a studio apartment priced at AED500K to AED600K; a 1BHK at AED800K to AED900K, and a 2 BHK apartment priced at AED1.3K to 1.5K; this was also acceptable because instead of paying rent, you could own your own property and became an excellent option.”
The strategy behind the 1 percent plan
The one percent plan proved to be an immediate success, drawing long queues of prospective buyers. Rizwan Sajan credits the support of banks to his 30 years of experience in the building business, enabling him to execute such a profitable strategy.
“The plan was that I would come up with an amount before the handover of the property collection,” he says.
The 1% plan devised by Rizwan Sajan proved to be a win-win for customers. He explains that once the building reached 60 percent completion, banks were willing to finance the remaining 40 percent of the property’s cost. This was designed to benefit our customers, banks, and Danube as well. This also eliminated the need for customers to approach banks directly or wait for lengthy approval processes and uncertain interest rates. The one percent plan is considered the core principle on which Danube Properties was built.
“The plan was that I would come up with an amount before the handover of the property collection,” he says. The one percent plan devised by Sajan proved to be a win-win for customers. He explains that once the building reached 60 percent completion, banks were willing to finance the remaining 40 percent of the property’s cost, even before the title deed was handed over to the customer. This eliminated the need for customers to approach banks directly or wait for lengthy approval processes and uncertain interest rates. The one percent plan is considered the core principle on which Danube Properties was built.
The affordable segment
And while the earlier market depended on expats, according to Sajan, the dynamics have changed. “Earlier it was 80 to 90 percent expats and 20 percent foreigners (living overseas), but now the figure has become 50/50 with many looking to make Dubai their second home which is excellent for the Dubai economy.”
While most developers were selling high-end villas, Sajan points out that there was “Whether they were residing in Bur Dubai, Karama, Sharjah, this group could not purchase property in those areas due to freehold restrictions,” he says. He came up with an innovative concept to build properties in near proximity to where they were living, enhance them with some luxury, and provide some amenities.
He explains, “After we offered 40 amenities, we realised we should add more; Danube’s success mantra is simple: one project at a time. We prioritize completing and selling out each project before moving on to the next one.”
Entering the luxury segment
With the launch of Fashionz by Danube and FashionTV, Danube Properties has entered the luxury market, aligning with the glitz and glamour that epitomises Dubai. Recognizing the pulse of property trends, Sajan seized the opportunity when Fashion TV arrived in Dubai, perfectly encapsulating Dubai’s opulent vibe.
“Fashionz is furnished by Fashion TV designers with interiors customised specifically for us, not available anywhere in Dubai,” he explains, backed by USP to create something unique in the market every time. Danube Properties Fashionz redefines luxury living with an exceptional selection of more than 40 unprecedented amenities.
Residents can indulge in extraordinary features such as an indoor swimming pool, 24/7 medical services, a kids’ play area, and much more, setting a new standard for lavish living in Dubai.
Sajan’s first CSR initiative focused on blue-collar workers, providing them with English language and computer skills training. This program aimed to empower these workers, as their inability to speak English often restricted them to heavy labour jobs, despite their potential and willingness to work. Unlike many other businesses that laid off employees during the pandemic, Danube Group chose not to terminate any of its workforces. This decision by Sajan provided a significant boost of motivation to the employees. The employees he had retained returned with full dedication, resulting in the company achieving its highest profits that year.
According to Sajan, moving forward, Danube Properties will continue in the same manner.
He explains, “Our policy has been quite simple; launch one project at a time, sell 70 percent of it and put that project into construction; then embark upon the next project. We have always followed this formula as illustrated with his recently launched Fashionz which is already 70 percent sold and Viewz, already 100 percent sold. If I don’t sell, I don’t start something new,” he says, with their next project Elitz 2 in JVC.
“Only after this is sold, we will move on to the next project; as the market can turn upside down in a few months, I would rather make smaller money and work on one project at a time.”
Supply and demand
In terms of Dubai’s burgeoning property sector, Sajan maintains that he is not worried about the supply in the market.
“I am not at all worried because unlike 2008 and 2009, this time the market is completely different. Earlier it was the flippers and not the demand. Today, the actual demand is coming from the expats who want to stay in a particular apartment or the overseas foreigners who aspire to make Dubai a second home,” he says.
Sajan is confident that Dubai’s remarkable reputation for safety, entertainment, infrastructure, taxation benefits, and Golden Visa will keep the market stable for two to three years without significant issues. He acknowledges the supply entering the market but emphasises that it is at a gradual and controlled pace rather than an overwhelming surge. This careful and measured approach is evident as developers launch new projects slowly and steadily.
Fully furnished to facility management
Danube excels not only in property sales for investors but has also launched a specialized company devoted to managing and selling properties. This innovative endeavor offers prospective buyers the unique opportunity to both rent and maintain their properties.
What truly distinguishes this company is the assurance of a guaranteed return on investment, ranging from 6-10%.
To further enhance the experience for investors, Danube has introduced an additional company that will handle all aspects of facility management. From furnishings to overall maintenance, this comprehensive approach ensures a hassle-free and worry-free property ownership experience. Investing in Danube grants you the peace of mind of seamless property management and unparalleled convenience.