Dubai: Dubai’s master-developer Nakheel has pulled out a stunning Dh4.96 billion net profit for 2016, a gain of 13 per cent on the previous year’s Dh4.38 million.
The final quarter of last year provided a strong close, with profits of Dh955 million, up 22 per cent on the same period 2016’s Dh781 million.
The final profit tally for 2016 is the developer’s highest ever.
The numbers are impressive given that the developer paid off Dh4.3 billion to its trade creditors on August 25last year.
The company declared itself debt-free at that stage. The results should also be seen in the context of the Dubai property market still in a correction phase, with transactional activity muted for the better part of the year.
Nakheel has not revealed its revenue split or other income details for the year.
On the operational side, the two emerging pillars in the Nakheel portfolio - retail and hospitality - turned in higher growth rates; retail recorded a year-on-year gain of 70 per cent plus while hospitality’s was 50 per cent up on 2015.
For over two years now, the developer has been pursuing creating a leased asset base, within which its growing retail interests should play out well. Last year, Nakheel Malls opened its phase one extension at Ibn Battuta Mall to a full house.
There were neighbourhood “pavilions” at International City and Al Furjan and the Club Vista Mare restaurant plaza on the Palm Jumeirah.
These added nearly 400,000 square feet of net leasable area to existing retail assets, thus bringing the total operational leasable space to 4.3 million square feet by end-2016. (There are multiple other retail assets Nakheel is developing, including a flagship mall for the Palm (on which the development phase is well advanced) and the massive Deira Islands Mall. These would bring the overall total to 17 million square feet of leasable area.)
“Under our ongoing commitment to maintaining the momentum, Nakheel awarded construction contracts worth around Dh3 billion in 2016, and is set to award Dh10 billion worth this year,” said Ali Rashid Lootah, Chairman.
“We are confident that our strategy of having a diversified business will significantly benefit Nakheel.
“We are currently working towards completing our healthy pipeline of projects and making them operational in the next few years, starting with The Pointe at Palm Jumeirah, one of our key hospitality and retail destinations, which is due to open this year.”
Last month, the developer said tenders were issued for a Dh5 billion “boulevard” on Deira Islands, which will create residential buildings in and around the mall.
Interestingly, these properties will form part of the developer’s leasing portfolio rather than sold as freehold.
In all, this contract will create 16 apartment towers together offering a combined 2,924 units.
Hospitality
On the hospitality side, the company’s division launched hotels at Dragon Mart (Ibis Styles, operated by Accor) and Ibn Battuta Mall (operated as a Premier Inn), with 623 rooms between them.
“Both hotels are expected to further contribute to the company’s financial results during 2017 – the first full year of operation,” the company said in a statement.
“A month into 2017, we have already begun handovers to customers on some of our completed projects, signed agreements with new hospitality partners, released the first of many construction tenders,” said Lootah.
“Later this yearm we will launch sales of our new project on Palm Jumeirah, Palm 360.” The twin-tower project is one of the signature luxury developments in the company’s pipeline, and was announced last September.
Nakheel also has another high-rise mega-project, at the Ibn Battuta cluster.
FACT FILE
* Last year, Nakheel handed over 1,426 land form and built form units, primarily in Palm Jumeirah, Jumeirah Park, Al Furjan and International City. Its residential leasing had occupancy rates at almost 100 per cent.
* Since 2010, the developer’s combined net profits have totaled Dh19.9 billion.
