Dubai Developer Nakheel Q1 Profit Up 36%

Dubai property developer Nakheel, one of the biggest casualties of the emirate’s real estate market crash in 2009, reported a 36 per cent rise in first-quarter net profit on Wednesday as residential property prices and demand rebounded.

The government-owned firm posted a profit of Dhs491 million ($133.4 million) in the quarter compared to Dhs362 million in the corresponding period of 2012, Nakheel said in an emailed statement.

Revenue for the first quarter was Dhs2.2 billion, up 62 per cent from a year earlier.

Nakheel delivered 770 homes in the first quarter including units at its palm-shaped island project, Palm Jumeirah, it said.

Dubai house prices plunged over 50 per cent over several years from a 2008 peak as a property boom turned to bust, with Nakheel among the most high-profile corporate casualties. The real estate sector has been recovering since last year.

First-quarter earnings “reflect the continual recovery of Dubai’s real estate market and solid investor confidence in Nakheel and its projects”, Nakheel chairman Ali Rashid Lootah said in the statement.

The developer agreed on a $16 billion debt restructuring in 2011 and scaled back grandiose plans, such as building a 1-kilometre high tower.

Nakheel said that since the restructuring it had paid over Dhs1.1 billion in loan interest and profit disbursements on Islamic bonds, and made cash payments of around 11 billion dirhams to trade creditors and contractors.