Nakheel 2013 Profit Up 27%; Plans Dhs6-8bn New Projects In 2014

Dubai developer Nakheel posted a profit of Dhs2.57 billion in 2013, an increase of 27 per cent over 2012, it announced on Sunday.

Revenues also rose 20 per cent to Dhs9.4 billion last year, up from Dhs7.8 billion in 2012.

The strong profit numbers indicate that Dubai’s property market is back and that it continues to post healthy growth, Nakheel chairman Ali Rashid Lootah told reporters.

“Our profits are indicative of the increasing level of investor trust and confidence they have in Nakheel, the growth in the local real estate market and the robust economic conditions prevalent in the UAE,” he said.

“The improved financial performance over the previous year has been possible by ensuring timely completion of our projects and the handing over of completed units to our customers.

“Our results also reflect continual strong performance across the retail, leasing and leisure segments of our business,” he added.

Nakheel has handed over around 7,600 units between the start of its restructure and the end of December 2013, including around 3,150 units last year, the company said.

Handovers were predominantly in Palm Jumeirah, Al Furjan, International City, Jumeirah Village, Jumeirah Park, and Jumeirah Heights residential developments.

Nakheel’s new development pipeline in 2013 included almost 3,500 new units at an estimated sales value of Dhs10 billion in various communities, approximately 3.6 million square feet of net leasable area retail space at an estimated investment of Dhs6 billion and more than 1,200 rooms in the hospitality sector at an estimated investment of Dhs1.5 billion.

Lootah also confirmed that the developer plans to launch new projects worth between Dhs6 to Dhs8 billion in 2014.

“The new projects will come up in areas where we already have infrastructure in place so that we can minimise the spend and maintain healthy growth,” he told reporters. They will include a mix of residential, retail and hospitality developments, he confirmed, with the first among them set to be announced within the first quarter of 2014.

Nakheel will also complete Palma Residences – its first project to be announced post-restructuring – as well as Dragon Mart Phase 2 and retail centres at Jumeirah Park and Al Furjan this year.
It plans to handover around 1,600 units to customers in 2014.

Nakheel, which was forced to undergo a restructuring after Dubai’s property crash in 2009, has also been fulfilling its financial obligations to creditors, said Lootah.

It completed interest and profit payments of around Dhs1.8 billion to all lenders up to 2013, and has issued a total trade creditor sukuk of around Dhs4.4 billion to date. It has made cash payments of around Dhs12.3 billion to various trade creditors and contractors since the start of its restructure.

The company also recently announced that it would prepay Dhs4 billion of its bank debt due in September 2015 – while Dhs2.35 billion is expected to be paid in February, another Dhs1.65 billion is slated for payment in Q3 2014.