Government-run Nakheel agreed a $16 billion debt restructuring in 2011 in the wake of a property crash that sent Dubai’s house prices tumbling by more than half from a 2008 peak, oversupply and the global financial crisis ending years of fervent speculation.
Yet the emirate’s real sector is resurgent, with rental and sales prices rebounding, and this helped Nakheel make an annual profit of 2.57 billion UAE dirhams ($699.70 million) in 2013, up 27 percent from a year earlier.
“Our profit will be better (higher) than last year – we are targeting 15 percent growth (in profit),” Nakheel chairman Ali Rashid Lootah told reporters in Dubai.
Lootah was speaking at a press conference to announce the launch of plot sales on Nakheel’s Deira Islands project, which consists of four islands, on Sunday.
Nakheel hopes to sell 94 plots – for 79 hotels and 15 resorts – to third-party developers on the first two islands. These range from 50,000 to 670,000 square feet.
Lootah declined to reveal how much money Nakheel expects to raise from the sales.
Nakheel’s own developments on the first two islands will include a night market, a mall, four hotels and one resort and will be completed by the end of 2017, with work to start this year, Lootah said.
When asked how Nakheel would fund its Deira Islands projects, Lootah said “you will find out very soon. We have funds available”.
The company began early repayment of 2.35 billion dirhams of bank debts in February, 18 months ahead of maturity in September 2015.
“After we made our prepayment we’ve seen a huge interest from the financial sector to finance future Nakheel projects,” said Lootah.
He dismissed concerns construction costs might increase with Dubai seemingly on the cusp of another building boom, saying there was still plenty of supply on the contracting side.
The firm’s leasing business will generate 1.2 billion dirhams in revenue in 2014, Lootah said, adding the unit’s revenue was half that amount in 2010.
He forecast leasing income would top 3 billion dirhams in 2016, with Nakheel to add 6 million square feet of retail space over the same period. It has about 2.6 million square feet at present.
“It’s our strategy to build more cash generating assets, we will still be developing but we will be focusing more and more on that,” added Lootah.-Reuters