Business | General

Nakheel first-half net profit soars to Dh1.2b amid healthier real estate market

Revenues reached Dh4.23b boosted by delivery of residential units

  • By Sarah Algethami, Staff Reporter
  • Published: 17:35 July 9, 2013
  • Gulf News

  • Image Credit: Virendra Saklani/Gulf News Archives
  • Construction of phase 2 of Dragon Mart. Nakheel is working on the expansion of Dragon Mart and Ibn Battuta Mall and the development of Nakheel Mall on Palm Jumeirah.

Dubai: A recovering real estate market boosted Nakheel’s first-half net profit to Dh1.2 billion — which rose 57 per cent from Dh767 million during the same time last year.

The property-developer recorded Dh4.23 billion in revenues for the first half of the financial year, up 36 per cent from Dh3.1 billion during the corresponding time a year ago.

A handover of completed projects is the main driver of revenues, the company said in a statement.

Nakheel delivered 1,400 properties in the first half of the year, predominantly in its residential developments, and expects to deliver 3,000 units this year, it said.

The residential developments include Palm Jumeirah, Al Furjan, International City, Jumeirah Village, Jumeirah Park and Jumeirah Heights communities.

According to Simon Gray, managing director of Chesterton International in the Middle East and North Africa, the property market in the UAE, and especially in Dubai, has seen strong demand for residential units in the last 12 months.

“The demand has driven rates per square foot in certain areas. So that means increased revenue streams for developers in Dubai,” Gray said.

Buyers are more confident that developers, such as Nakheel, will deliver projects on time amid a healthier property market.

They are targeting completed projects that are well located, he said.

“The increased demand is driven by both regional and international factors: increased business confidence in Dubai as regional hub, its location [which] provides stability in the region — this is attracting foreign direct investments into Dubai, and fuelling the uplift in the property market,” he said.

He said investor confidence has increased due to a better regulated and stable property market, and the caution practiced by banks when lending to developers.

Meanwhile, as part of its financial restructuring, Nakheel said it had made a Dh206 million interest payment to bank lenders and a Dh210 million payment to holders of its sukuk during the first half.

Additionally, the developer made a payment of around Dh11.3 billion to trade creditors and contractors.

Nakheel has been working on a number of retail and residential projects, including the expansion of Dragon Mart and Ibn Battuta Mall and the development of Nakheel Mall on Palm Jumeirah and Jumeirah Islands.

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