Dubai recovery boosts Nakheel profit

Nakheel's net profits surge by more than a third in the first quarter of the year, bolstered by a recovery in the Dubai property market and returns on its retail, leasing and leisure segments.

Nakheel, the developer of Discovery Gardens, has seen sale prices of apartments jump in the first quarter. Sarah Dea / The National

Nakheel's net profits rose 36 per cent in the first quarter of the year, helped by a recovery in the Dubai property market and returns on its retail, leasing and leisure segments.

The developer posted a profit of Dh491 million (US$133.6m) in the first quarter of the year, compared with Dh362m a year earlier.

"Our robust results for the first quarter speak for themselves," said Ali Rashid Lootah, the chairman of Nakheel, announcing the results yesterday. "Not only do they highlight the ongoing support of the Government of Dubai and our commitment to delivering our post-restructuring plan, they also clearly reflect the continual recovery of Dubai's real estate market and solid investor confidence in Nakheel and its projects."

A resurgence in Dubai's property market has gathered momentum in recent months as buying, selling and building of projects pick up. After feeling the pain of the property downturn during 2009, Nakheel is now enjoying the benefit of the upturn.

Sale prices at its Discovery Gardens apartment complex in Jebel Ali jumped by a third in the first quarter, the highest rise in the city for apartments, according to research released this month from the property broker Asteco. The city's most expensive area was Palm Jumeirah, another Nakheel built-development, Asteco said.

Nakheel is also pushing ahead with other projects, some of which were stalled during the property market downturn of 2009. It delivered about 770 new homes in the first quarter, taking its total completion of new homes to 5,400.

Handovers were mainly in Palm Jumeirah, Al Furjan, International City, Jumeirah Village, Jumeirah Park and Jumeirah Heights. The company said it was on course to hand over an estimated 3,000 units during the year.

"The first quarter has been a hive of activity for Nakheel, with continued delivery to customers and ongoing construction of a growing number of residential and retail projects," said Mr Lootah. "We remain focused on implementing our sustainable, realistic long-term business strategy, which is fundamental to the growth of Dubai's real estate sector."

Nakheel's revenues grew 62 per cent to Dh2.2 billion in the first quarter, up from Dh1.3bn in the same period last year, it said.