An artist’s impression of the Palma Residences. Work on the luxury project is expected to take around 18 months to complete. Image Credit: Courtesy: Nakheel

Dubai: Nakheel launched a new luxury project on the Palm Jumeirah yesterday, its first major residential development since completing a massive restructuring process.

Rashid Ali Lootah, Nakheel's chairman, said construction of the Palma Residences was expected to take around 18 months to complete and that 30 units had already been sold at a combined value of almost Dh223 million.

Nakheel, which also said it plans to issue the second tranche of its Dh4.8 billion sukuk by the end of April, has appointed Dubai Civil Engineering as the main contractor on the project in a deal worth Dh194 million.

"We have proof that prices on Palm Jumeirah are not going down. We are selling plots of land at prices that are higher than pre-crisis levels," Lootah said.

"[There is] a clear sign of renewed investor confidence in Dubai real estate and in particular for unique projects such as those offered on Palm Jumeirah. We have seen a very healthy demand in the first quarter of 2012 and this looks set to continue," he added.


Prices for Palma Residences, which is located on a 61,000 square metre area of reclaimed land off the eastern side of Palm Jumeirah's trunk, range from Dh6-Dh8 million. Engineering consultancy Halcrow has been appointed as the development's beach profiling consultant with work scheduled to start within the next three to five months.

Lootah also said yesterday the second tranche of Nakheel's sukuk will be launched soon.

The first portion of the sukuk, worth Dh3.8 billion, was issued in August, carrying a profit rate of 10 per cent. The second tranche will be Dh240 million in size, less than a quarter of the expected value, after Nakheel persuaded trade creditors to accept a huge discount on their original claims.

"The second tranche, I think, will be launched by the end of this month. It will be all the same terms," said Lootah, adding the sukuk would be listed on Nasdaq Dubai "as soon as is practical."

The sukuk is part of Nakheel's $16 billion debt restructuring deal which repays trade creditors 40 per cent in cash and 60 per cent via the bond.

Nakheel said last August it had completed the restructuring of its $16 billion debt pile.