Dubai: In what will be a substantial boost for the local construction sector early in the new year, Nakheel confirmed tenders will be called for the Dh1.7 billion plus (excluding the land cost) Deira Islands Mall — with a gross leasable area of 2.85 million square feet — by late January.
The mall project will also encompass two hotels offering a combined 600 keys and properties with 300 serviced apartments.
The Mall itself is looking at a three-year project, as the developer scales up its retail and residential leasing portfolio. It will also see four residential towers being built by Nakheel, which will go into its leasing portfolio, which is an income stream that the developer has been focusing heavily on.
Another major tender — potentially around Dh500 million — will be for adding 640,000 square feet of leasable area at Ibn Battuta Mall. In the medium-term, Nakheel’s target is to have a retail leasing portfolio of 10 million square feet.
“For 2015, we are planning on awarding project tenders totalling Dh7 billion on top of the Dh5.3 billion awarded this year (lower than the Dh6 billion that had been projected earlier),” said Ali Rashid Lootah, Nakheel’s Chairman. “We do not see an impact on Dubai from the oil price situation … the property market too will be insulated as in any uncertainly investors will look to staying committed to real estate.”
Confirmation of the mall, hotels and residential high-rises comes on top of a sizeable investor platform Deira Islands has already attracted. The 90 plots that were put up for sale to sub-developers earlier this year for waterside hotels have been acquired, Lootah said. Demand was also high for the small outlets that will make up the Night Market there.
High lease rates
Nakheel will, at the same time, develop a resort project on Deira Islands in “partnership with a global name”, Lootah added.
“There’s very limited new build happening in Deira and that means extremely high lease rates on apartments and offices. With Deira Islands, substantial new capacities are being created — once major infrastructure works are ready, we will focus on the freehold component there and when we can get better pricing.”
Another sizeable exposure will take the form of 80 high-rises — offering a combined 4,000 units — in the Port Jebel Ali area. Another focus of the project will be the Waterfront, where it intends to fast-track the needed infrastructure works for the sub-developers to come in and do their bit.
At Nad Al Sheba, there will be 1,500 villas that Nakheel is building. It will also be opening the retail and F&B components at the Golden Mile on Palm in the first quarter, with the British supermarket operator Waitrose confirmed as an anchor tenant.
Asked if it might be time to consider tapping a loan to part-fund upcoming projects, Lootah said: “So far, we have enough of own funds to cover requirements. But if we were to approach the banks to borrow, they won’t be saying ‘no!’.”
