Rizwan Sajan: The 1% Man

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.

Outstanding CSR

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.

Future launches

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.

Sr: https://www.arabianbusiness.com/industries/real-estate/rizwan-sajan-the-1-man