Nakheel eyes Dh8 billion new projects
Developer 2013 profit surges 27.2%, revenues jump 20.5% on improving property market
Buoyed by a significant surge in profits and revenues in 2013, Dubai developer Nakheel is setting eyes on launching more projects including hotels and a shopping mall involving up to Dh8 billion in investment.
Nakheel on Sunday reported a 27.2 per cent rise in full-year profit to Dh2.57 billion on a 20.5 per cent jump in revenues to Dh9.4 billion on the back of buoyancy on the property market.
Ali Rashid Lootah, Nakheel’s chairman, said the strong profit and rise in revenues underscored the robust recovery in Dubai’s property market. The profits are indicative of the increasing level of investor trust and confidence in Nakheel against the backdrop of a rebounding real estate market and robust economic conditions, Nakheel chief said.
He said the developer’s improved financial performance in 2013 over the previous year was possible by ensuring timely completion of projects and the handing over of completed units to customers.
“Our results also reflect continual strong performance across the retail, leasing and leisure segments of our business,” Lootah said.
In 2013, Nakheel handed over 3,150 units and sold 3,500 properties. For 2014, the developer expects new unit handing over to drop to 1,600 units.
Since the start of its restructuring, Nakheel has handed over around 7,600 units. Those were predominantly in Palm Jumeirah, Al Furjan, International City, Jumeirah Village, Jumeirah Park, and Jumeirah Heights residential developments, the developer said.
Nakheel’s new development pipeline in 2013 included almost 3,500 new units at an estimated sales value of Dh10 billion in various communities, around 3.6 million square feet of net leasable area retail space at an estimated investment of Dh6 billion and more than 1,200 rooms in the hospitality sector at an investment of Dh1.5 billion.
Lootah said the new projects would come up in areas where Nakheel already has infrastructure in place.
Lootah said about 80 per cent of property buyers in Nakheel’s stalled projects have now settled with the developer, with 20 per cent of buyers still in dispute. These can get their cash back five years from the date of Nakheel signing its restructuring deal, he said.
He said Nakheel would consider an initial public offer of shares after the company settled its debts.
In a statement, the developer said that it had made interest and profit payments of around Dh1.8 billion to lenders, issued a trade creditor sukuk of around Dh4.4 billion, and made cash payments of about Dh12.3 billion to various trade creditors and contractors since the start of its debt restructuring.
The firm handed over 3,150 units in 2013, although this is poised to drop to 1,600 units this year. Last year, it sold 3,500 properties.
Earlier this month, Nakheel said it would repay this year up to Dh4 billion of bank debt due in 2015 and hoped to become debt free by 2018.