Nakheel profits hit Dh1.1bn as sales soar

Nakheel's profits nearly doubled to Dh1.1 billion in the first nine months of the year as fresh sales, together with retail and leasing activities, bolstered the developer's bottom line.

Signs of revival in Duabi's property market has helped Nakheel's recovery. Satish Kumar / The National

Nakheel's profits nearly doubled to Dh1.1 billion (US$299 million) in the first nine months of the year as fresh sales, together with retail and leasing activities, bolstered the developer's bottom line.

Profits rose from Dh600m in the same period of last year, Nakheel said yesterday. Revenues grew by 126 per cent to Dh4.5m, up from Dh2m over the same period.

"These robust results are a reflection of the buoyant market conditions in Dubai and the ability of Nakheel to leverage the assets it has developed," the company said.

The results signal progress in Nakheel's efforts to return its business to a sustainable footing after racking up debts during the Dubai property downturn of 2009.

Since then the company has been taken under the direct ownership of the Dubai Government and has undergone a restructuring to repay lenders. The process is due to run until August 2016.

Now, a resurgence within the emirate's previously struggling property market has helped to drive Nakheel's recovery.

Prices on Palm Jumeirah, its flagship development, have "crossed pre-crisis levels", the developer said.

From its restructuring through the past nine-month period, the developer has delivered 4,000 units to customers, it said. Most were within residential developments in Palm Jumeirah, Jumeirah Village, International City, Al Furjan and Jumeirah Heights. Most properties under construction were expected to be handed over to customers either in the last quarter of this year or next year.

Ali Rashid Lootah, Nakheel's chairman, and Sanjay Manchanda, who was appointed chief executive this month, have also been working hard to regain trust with buyers.

The Cityscape exhibition in Dubai this month signalled some cause for optimism. Nakheel took deposits on nearly Dh1bn of property for the first phase of villas it plans to build at its Jumeirah Park site.

Demand was also strong in its retail and leasing activities, where occupancy levels were close to 100 per cent, Nakheel said.

It said it had started work on the expansion of the Dragon Mart mall and was planning an extension at Ibn Battuta Mall, where there was "surging demand from retailers".

Work was also progressing on other projects to build community centres in its residential developments, along with Jebel Ali Recreational Club, the Palm Mall and The Pointe on Palm Jumeirah.

"Whilst Nakheel focuses on new projects to ensure long term sustainability of the business, Nakheel continues to meet its restructuring commitments towards various stakeholders comprising of customers, vendors and creditors in order to contribute to the local economy," it said.

The developer completed an interest and profit payment of about Dh211m to its lenders in August, it said. Cash payments to Nakheel's trade creditors had reached Dh9.4bn since the start of the restructuring.

Long term customer liabilities had been cut by Dh7.2bn through various consolidation and swap schemes offered to its customers.