UAE billionaire Hussain Sajwani to invest $20 billion in US data centres, Trump says

UAE company Damac Properties has made a $20 billion investment in the US to build data centres, president-elect Donald Trump announced on Tuesday. Hussain Sajwani, founder and chairman of the Dubai-based real estate developer, said it could increase its investment under the right market conditions.

“We’ve been waiting four years to increase our investments in the US to a very large amount of money,” Mr Sajwani said alongside Mr Trump in Palm Beach, Florida. He said the investment would go towards data centres that cater to artificial intelligence and cloud businesses.

Mr Trump said the first phase of the project will be carried out in Texas, Arizona, Oklahoma, Louisiana, Ohio, Illinois, Michigan and Indiana. “The investment will support massive new data centres across the Midwest, the Sun Belt area, and also to keep America on the cutting edge of technology,” he said.

The US investment follows similar investments the group has recently made in Thailand and Saudi Arabia.

“[Mr Sajwani] has done sterling work in helping promote the US-UAE business and trade relationship and this new deal underscores his interest in advancing his work … particularly in these data centres,” Danny Sebright, president of the US-UAE Business Council in Washington, told The National.

In February, Damac’s digital unit Edgnex Data Centres linked up with British telecoms operator Vodafone to invest $100 million in a project in Turkey. The data centre, which will be built in Turkey's third most populous city of Izmir, will have a capacity of six megawatts and is expected to be completed by 2025,

Demand for data centre infrastructure grew during the coronavirus pandemic as companies moved their business to the cloud in response to the disruption caused by Covid-19.

Hussain Sajwani, founder and chairman of Damac Properties, addresses a news conference in Florida. AP

Last year, Damac launched about 12,000 new home units and plans to introduce a similar number this year. In December, the company launched Damac Islands development at Dubailand and sold more than 3,000 units in less than 10 hours, with sales totalling Dh10 billion ($2.72 billion), according to the company.

Tuesday's announcement is the latest major foreign investment into the US after Mr Trump won the 2024 presidential election.

SoftBank chief executive Masayoshi Son last month announced the Japanese company would invest $100 billion in US projects over the next four years.

Mr Trump has said both investments were made because businesses approved of his election win.

“He was very inspired by the election. They wouldn't do it without that election. I can tell you a lot of people wouldn't,” the president-elect said of Mr Sajwani.

Trump Organisation ties

The Emirati businessman has a close relationship with Mr Trump. A Trump-branded golf club in Dubai under Damac was also opened before Mr Trump left office in 2017. It is the Middle East's only Trump-branded golf course.

“He is a well-respected business partner of Mr Trump,” Mr Sebright said. Now, the company is again open to work with the Trump Organisation on new projects.

“If the right opportunity presents itself, we are more than happy to work with our all trusted partners, whether it is the Trump Organisation or any other partner,” Ali Sajwani, managing director of Damac Properties, told The National in December.

The Trump Organisation, owned by the president-elect, is also teaming up with London listed Dar Global to develop projects in Oman, Dubai and Saudi Arabia.

Eric Trump, one of Mr Trump's sons and the organisation's executive vice president, said the company is also hoping to further expand into the region with new projects.

Founded in 2002, Damac Properties was listed on the Dubai Financial Market in January 2015. However, in March 2022, the company was delisted and converted back into a private entity.

Will the pound fall to parity with the dollar?

The idea of pound parity now seems less far-fetched as the risk grows that Britain may split away from the European Union without a deal.

Rupert Harrison, a fund manager at BlackRock, sees the risk of it falling to trade level with the dollar on a no-deal Brexit. The view echoes Morgan Stanley’s recent forecast that the currency can plunge toward $1 (Dh3.67) on such an outcome. That isn’t the majority view yet – a Bloomberg survey this month estimated the pound will slide to $1.10 should the UK exit the bloc without an agreement.

New Prime Minister Boris Johnson has repeatedly said that Britain will leave the EU on the October 31 deadline with or without an agreement, fuelling concern the nation is headed for a disorderly departure and fanning pessimism toward the pound. Sterling has fallen more than 7 per cent in the past three months, the worst performance among major developed-market currencies.

“The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome,” said Mr Harrison, who manages more than $10 billion in assets at BlackRock. “We will see this game of chicken continue through August and that’s likely negative for sterling,” he said about the deadlocked Brexit talks.

The pound fell 0.8 per cent to $1.2033 on Friday, its weakest closing level since the 1980s, after a report on the second quarter showed the UK economy shrank for the first time in six years. The data means it is likely the Bank of England will cut interest rates, according to Mizuho Bank.

The BOE said in November that the currency could fall even below $1 in an analysis on possible worst-case Brexit scenarios. Options-based calculations showed around a 6.4 per cent chance of pound-dollar parity in the next one year, markedly higher than 0.2 per cent in early March when prospects of a no-deal outcome were seemingly off the table.

Bloomberg