Dubai: Boosted by revenues and net profit growing at 20 per cent and more in 2013, Nakheel is once again ready to take on mega-projects, including a 1.5- to 2-million-square-foot shopping mall off the Deira coastline and close to the earlier announced “night market”.
The mall dimensions immediately place it among the top three in terms of gross leasable area, just behind The Dubai Mall (3.77 million square feet) and Mall of the Emirates (2 million square feet plus). In retail industry parlance, anything over 800,000 square feet comes under the definition of “super-regional mall”.
This year will see Nakheel launch Dh6-8 billion worth of projects, including multiple hotels, which will now be a major focus area.
Nakheel reported a 27 per cent gain in net profit to Dh2.57 billion last year, on revenues of Dh9.4 billion, which were up 20 per cent over 2012’s Dh7.8 billion. Revenues were boosted by unit and plot sales as well as a 300 per cent increase in cash collections to total Dh7.1 billion last year.
Simultaneously, the developer was putting its funds to good effect in taking care of its long-standing obligations to contractors. “We pumped Dh12.3 billion into the market and will continue to do that with more projects,” said Ali Rashid Lootah, Nakheel’s chairman.
“There will not be any new land bank additions...we have enough. The new projects will be where the infrastructure is advanced and thus minimise our costs. That means existing, short-term areas and not Palm Jebel Ali or Waterfront.”
More than 80 per cent of buyers in Nakheel’s long-delayed projects have been compensated, according to officials.
Earlier this month, the company had announced that it was bringing forward its repayment obligations to creditor banks, with the first tranche — Dh2.35 billion — to be handed over next month and another, of Dh1.65 billion, in the third quarter. It had also announced at the time that it would not be utilising funds on offer from the Dubai Government as part of its restructuring.
Nakheel’s emphasis on topping up its retail and hospitality assets is a nod to the times. This will provide the developer with consistent income generating possibilities than the more cyclical nature of the residential and office realty markets. Even then, this year will see the launch of an additional 3,500 new homes within its communities.
On the delivery side, mid-year will see the handover of the first project that it announced post the crisis, the Palm Residences. Dragon Mart Phase 2 is another heading for completion, while a hotel in Deira is to be ready before year-end. By 2016, its hotel portfolio would rise to nine.
“On our part, we are doing everything not to see sharp increases in values of Nakheel properties, by having measures like a 50 per cent down payment,” said Lootah. “Comparing like-to-like, we didn’t increase [launch] prices in the last year.” The Nakheel announcement also kicked off the reporting season for UAE corporate results.
