Real estate tycoon joins Trump

When Emirati billionaire Hussain Sajwani accidentally mentioned to his long-time business partner Donald Trump over dinner that he planned to expand into U.S. data centers, the candidate President Im sensed an opportunity.

“He said, 'I have a press conference in a few days and I want to make an announcement,'” Sawani told the Financial Times in an interview last week at his villa in Dubai amid artificial palm trees. is a symbol of the entrepôt's overconsumption and its appeal to millionaires from around the world, from footballers to former warlords.

At a press conference at Mar-a-Lago this month, the world's most powerful man described Savani as a “great investor” as the two side by side announced a $20 billion investment plan. That thrust the Emirati entrepreneur, who started out in food services and built swaths of the Middle East's glitzy business hubs through Damac, Dubai's largest private residential developer, into the global spotlight.

The plan to spend $20 billion over four years seems ambitious. Sajwani's data center company Edgnex has not signed any contracts with tenants for its planned 2,000 MW US data center. Founded in 2021, the company will soon have 15MW of operational data centers in Saudi Arabia and Thailand. The investment would be a huge sum for Damac, which had $5 billion in cash on its balance sheet as of June last year.

Sajwani said he expected to rely largely on bank loans to fund the plans, adding that the $20 billion figure was based on “what we think we can get from management time, land acquisitions and our own balance sheet capacity.” “To estimate.

Sometimes called “The Donald of Dubai,” Al-Sawani is considered an outsider by Dubai's business community. He belongs to the minority Shia Muslim sect and is considered a risk-taker who has endured the boom-and-bust rollercoaster ride of Dubai's real estate market. “The old (Dubai) family didn’t really like him,” said a Dubai executive who worked with Sajwani.

Instead, the real estate mogul found an American ally. Sajwani and Trump have known each other since 2011, when DAMAC and the Trump Organization built the first Trump-branded golf course in the Middle East.

Plans for a second Tiger Woods-designed link in Dubai have fallen through, Savani said, although the project remains on the Trump Organization's website. Still, the families have stayed in touch: Trump's sons attended Savani's daughter's wedding, and Savani said their wives have become friends.

The Emirati tycoon also has connections elsewhere in Trump's inner circle. He invested in Elon Musk’s SpaceX and xAI. The 72-year-old was photographed attending Trump's New Year's Eve celebrations with the pair.

Since the completion of the Trump International Golf Course in Dubai, the Trump Organization has sold its name to other partners in developments in the region: A resort is under construction in Oman and two towers – one in Saudi Arabia's second city Jeddah and another in Dubai – are being planned.

Although the president-elect has withdrawn from the Trump Organization, these Middle Eastern business ties have raised questions about potential conflicts of interest.

Trump's sons run the conglomerate as they look to capitalize on strong post-Covid economic growth in the autocratic, hydrocarbon-rich Gulf region. “If you’re a developer, Dubai is pretty much your playground,” Eric Trump told the Financial Times in an interview last year, calling the region’s growth “explosive.”

Dubai's recent boom has seen DAMAC's sales soar. Revenue from the latest DAMAC real estate account hit $1.4 billion in the six months to June 2024, more than double the $690 million in the same period a year earlier. Pre-tax profits jumped from $297 million to $456 million.

The soft-spoken Sajwani, the son of a market trader and a door-to-door salesman, has a net worth of more than $5 billion, according to Forbes. A local businessman remembers his first venture in the 1980s, opening a fast-food restaurant in a shopping mall. Sajwani then started an industrial catering company and bought land and properties in the 1990s as he established Dubai as a regional hub. He founded DAMAC in 2002.

The company barely survived the 2008 global financial crisis and the bursting of Dubai's real estate bubble. “We were having a hard time paying wages,” Savani recalled. “In November 2008, I went to the bank and told them my situation was very bad.” He said bankers restructured his debt while he negotiated with landowners and customers.

“This guy has nine lives,” said one Dubai-based international banker. “He almost broke down a lot of times.”

The company is promoting its construction from China to India in an attempt to attract new buyers into Dubai's volatile real estate market. But its reputation has been tarnished by links to shoddy construction work. “We had challenges in 2011 and 2010,” Sajwani said. “We launched some products in a mediocre location (…) and we sold them very cheaply.” He insists the quality matches the price, but admits buyers may expect better.

“Are we perfect? ​​No. I agree, there are some buildings we could have done better,” admits Sajwani. “We learned our lessons. . . . If you look at the buildings we've just delivered over the past few years, I don't think we have a quality issue.”

Privately held Damac's brash marketing techniques have shaken up a property market dominated by state-backed developers such as Nakheel and Emaar. In addition to offering free flights to Dubai to potential investors, Damac has also promised to provide free limousines to apartment buyers.

In 2014, Mohamed Alabbar, chairman of rival Emaar, criticized such promotions as “unethical”. But Savani called the giveaways “the best, greatest idea.”

DAMAC has expanded beyond Dubai, with projects ranging from Miami to the Maldives. However, Sajwani's overseas ventures initially proved difficult: a 2006 deal to buy land in Egypt ended in a legal dispute with the government after the 2011 ouster of dictator Hosni Mubarak. In 2011, Sawani was sentenced in absentia to five years in prison on corruption charges, although Egypt's prosecutor general later suspended the sentence. Sajwani said the trial was politically motivated.

“After that, I stopped investing in countries that would have challenges,” Savani said.

The entrepreneur wasn't always well-liked by outside investors. In 2022, he will delist DAMAC shares from the Dubai Stock Exchange and regain full control. Some investors have complained that they funded the company during the market downturn, only to be driven out as the stock price moved in their favor.

Savani denied that he timed the trade to gain returns and said market “speculators” drove the decision: “We felt that going public did not benefit us. We got a lot of negative press from speculators. ”

U.S. data centers are his latest risky bet. Edgnex said it initially plans to form joint ventures with established players or possibly purchase existing facilities and land ready for development. Even so, analysts say achieving the U.S. target of 2,000 MW of installed capacity will still be difficult in such a crowded market.

Pat Lynch, head of data centers at CBRE Real Estate Advisors, said: “As a developer, especially someone new to the field, once you find momentum, the challenge is finding a spot in the queue to come Get all the equipment you need” Solutions Team.

“Typically, the largest developers and very large (tech) companies have entered the queue through purchases years ago.”

One industry executive said even a $20 billion investment was unlikely to have an impact: “In the context of data centers, it's almost a yawn.”

Doubts are unlikely to bother Savani. Like his presidential business partners, Sawani insists that critics are uncomfortable with his role as a disruptor: “People will tell you, 'Hussein Sawani…' . . . He's a very Difficult people. Which successful man is easy?