Dubai’s Nakheel says it is now a ‘debt-free’ company

Dubai developer Nakheel is now a completely “debt-free” company, having made arrangements to repay its Dhs4.4bn trade creditor sukuk this month, it announced on Monday.

Chairman Ali Rashid Lootah said that the company had transferred the amount to Deutsche Bank on Sunday, in order to repay sukuk-holders. The Islamic bond matures on Thursday, August 25 and was repaid from Nakheel’s own internal resources.

“We are now a debt-free company,” Lootah told reporters. “It was a challenging period we went through, but we managed to meet our commitments.”

The developer was hit hard by the 2009 property market crash and was forced to undertake a $16bn debt restructuring in 2011.

Nakheel prepaid Dhs7.89 of its bank debt in 2014 – four years before the scheduled repayment date.

“As we close the curtain on our restructuring programme, we look forward to starting a fresh chapter in which we are stronger and more resilient than ever,” said Lootah.

With its debts repaid, the developer is looking to borrow from banks again, he confirmed.

“We now have no restrictions on borrowing, so we will go to the market. We are speaking to a number of lenders and have seen strong interest from them in financing our projects.”

The company is exploring the cheapest ways to borrow and is not planning on a sukuk or a bond, Lootah stated.

“We will borrow before the end of the year. The figure [amount] to be borrowed has not yet been finalised and will depend on how the projects go. But we don’t see any problem [in getting the amount that we want],” he added.

Also read: Exclusive Interview: Nakheel’s Turnaround Man, Ali Rashid Lootah

Nakheel recently posted a 4 per cent rise in net profit for the first six months of 2016 to Dhs2.95bn, up from Dhs2.83bn in the first half of 2015.

“We have seen our net profits grow five times since 2010 and I can assure you that we will continue growing,” Lootah said.

A big part of the strategy going forward continues to remain on boosting the company’s retail, hospitality and retail sectors.

Retail projects under development – including Nakheel Mall, The Pointe and Deira Islands Night Souk among others – cover a total net leasable area of 5.6m sqft and are estimated to cost Dhs15.1bn.

In the pipeline are other retail projects such as the massive Deira Mall and Dragon City which cover 6.7m sqft of net leasable area. Many of these projects are expected to be tendered this year, confirmed Lootah.

Also read: Deira Islands Mall to offer most retail space in Dubai – chairman

On the hospitality side, hotel projects under development – costing Dhs2.7bn – will add 1,461 rooms to Nakheel’s portfolio. A further 3,472 rooms are in the pipeline, with the developer aiming to manage 12 hotels in the long term.

“We are confident about reaching our Dhs7.7bn from recurring income by 2020,” Lootah added.