Land drives 2007 profits

Dubai: Government-owned property developer Nakheel has announced that profit last year surged almost five-fold to $1.28 billion after selling more land and building fewer homes.

Nakheel is capitalising on surging demand for property in Dubai, whose economy is booming on a near six-fold increase in oil prices during the last six years.

At Nakheel, net income in 2007 rose to Dh4.69 billion
or Dh5.66 per share, compared with Dh1 billion, or Dh1.42 per share, in 2006. The Nakheel statement appeared on the website of the Dubai International Financial Exchange (DIFX).

Revenue from the sale of land surged nine-fold to Dh10.5 billion, while costs associated with building apartments fell almost three-quarters to Dh1.53 billion and houses to Dh1.12 billion, Nakheel said.

The sale of land includes those at The World project, a collection of islands Nakheel is building in the shape of a world map.

The company had $26.4 billion of projects under construction in January last year, according to its statement. Loan debt more than doubled in the year to December 31 to Dh10.16 billion, with the biggest facility, for Dh6.7 billion, maturing in 2012.

Nakheel chief financial officer Kar Tung Quek told Reuters in February that the company was in talks to create two REIT companies, one to help finance infrastructure schemes and the other to fund residential projects.

Between them, the REITs would aim to hold assets worth Dh8-10 billion Quek said.