Nakheel's first half net profit dips 3.8% to Dh2.51 billion

The property developer did not provide a reason for the decline

Nakheel, which last year awarded Dh8bn worth of contracts for its developments, signed in the first half of this year contracts worth more than Dh6bn. Courtesy: Nakheel

Nakheel, the property developer behind the Palm Jumeirah, posted a 3.8 per cent year-on-year decline in first half net profit to Dh2.51 billion, without providing a reason for the decline.

The property developer handed 451 units to customers in the first six months of the year, it said in a statement on Wednesday. It didn’t provide comparable figures for the first half of 2017. The company posted a 10.5 per cent year-on-year decline in first half net profit in 2017.

Nakheel's “non-development businesses – retail, leasing, hospitality and asset management – all performed strongly,” the company said. “Annual revenues from these sectors is now Dh2.6bn – three times as much as in 2010 – and currently accounts for 38 per cent of the company’s total revenue.

Revenue from these segments is set to grow with the completion of projects, including The Pointe, due to open this year, and The Night Market, Warsan Souk, The Palm Tower and Nakheel Mall, which are due to come on line in 2019.

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Nakheel to invest Dh5bn in new hotels in five years, chairman says=

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Nakheel plans to invest Dh5bn in new hotel projects over the next five years as part of a Dh27bn retail and hospitality expansion to diversify its offerings, chairman Ali Lootah said in July.

Dubai’s real estate sector softened over the last three years amid an increase in supply, lower oil prices and job cuts. Real estate deals transacted in the first half of this year, fell 16 per cent year-on-year to Dh111bn, according to a report from the Dubai Land Department released in July.

The UAE government is implementing a series of measures to prop up the economy, which should trickle down to the real estate sector. In May, the UAE announced a 10-year UAE expat residency for professionals and 100 per cent foreign ownership of businesses outside as well as inside the free zones.

Nakheel, which last year awarded Dh8bn worth of contracts for its developments, signed deals valued at Dh6bn in the first half of this year.

These contracts include: Dh4.2bn for Deira Mall; Dh600 million for Nad Al Sheba Mall; Dh447m for a bridge between Deira Islands and mainland Dubai; and Dh385m for the 800-room RIU resort at Deira Islands.