• Home
• /
• Realty
• /
• Business

Nakheel gets Dh17b funding for new waterfront projects

Signs agreement with a syndicate of three banks including Mashreq Bank, Dubai Islamic Bank and Emirates NBD for refinancing Dh11 billion and additional funds of Dh6 billion for new projects

Nakheel on Tuesday said it signed a deal with leading UAE banks to secure Dh17 billion ($4.63 billion) in financing to drive new phase of growth in coming years.

Dubai state developer, which developed the palm-shaped island of Palm Jumeirah, said it signed agreements with a syndicate of three banks including Mashreq Bank, Dubai Islamic Bank and Emirates NBD for refinancing Dh11 billion and additional funds of Dh6 billion for new projects amid a red hot property market.

In a statement, Nakheel said new funding will support its development strategy including projects such as Dubai Islands and other waterfront projects.

Nakheel, which successfully completed a massive debt restructuring programme, is cashing in on a rise in demand for coastal properties in the wake of the coronavirus pandemic.

"The transactions will further strengthen the company's financial position, and reflects the confidence of the banking institutions in the strategic new focus of the company," according to a Nakheel spokesperson.

The spokesperson said Dubai’s real estate sector is recording robust growth, driven by regulatory reforms, such as the issuance of long-term visas, and a buoyant economy supported by the robust growth of retail, leisure and hospitality.

"As Dubai’s pioneering master-developer with high-performing assets in these core economic sectors, we are entering a new phase of growth placing our customers at the heart of everything we do. This new era of Nakheel will be defined by our commitment to developing exceptional communities, enhancing customer-oriented services, and delivering value across all touch points,” the spokesperson said.

Focus on Dubai Islands

Nakheel is planning to develop another man-made island named Dubai Islands, formerly known as Deira Islands, comprising five islands over a total area of 17 square kilometres.

In September, the master developer said it is also revisiting the plan for the Palm Jebel Ali, a project that has been left dormant since 2009.

"Nakheel matured a lot over the years. It's nothing like the adventurous company it once was in 2008," said Nasser Al Shaikh, Dubai's former finance chief who helped navigate the emirate through the 2009 debt crisis.

"This is evident in the utilisation of the new facility where most is going to restructure & optimise current debt, leaving enough to launch new highly anticipated developments such as Dubai Islands & Palm Jebel Ali," Al Shaikh said.

Growing property market

The real estate market in Dubai, the Middle East's financial and tourism hub, began its recovery early last year in the wake of the coronavirus pandemic as the government kept its economy and airports mostly open.

First-half residential real estate transaction volumes rose 60 per cent, with an 85 per cent rise in the value of properties sold, property consultancy Betterhomes said in a July report.

A villa on Nakheel's Palm Jumeirah island in July fetched Dh302.5 million ($82.36 million), its developer Alpago Properties said in October without naming the buyer due to privacy reasons, setting a new record for the most expensive residential property ever sold in the emirate.

"The transaction is a very good sign that the demand is still strong and banks willing to do such a large deal with Nakheel shows that they also see signs of positive cash flow in the future," said Mohammed Ali Yasin, an investment and capital markets advisor in Abu Dhabi.

Nakheel’s residential. retail and hospitality assets have recorded excellent growth despite the challenges of the pandemic. The company’s fiscal focus, highlighted by efficient management of resources and a stable retail and hospitality portfolio, has gained the trust of its customers and financial institutions.

Over the past two years, Nakheel has also invested in building a strong assets portfolio and pipeline of new developments which will deliver consistent revenue growth in future years, and support the goals of the Dubai 2040 Urban Master Plan and ensure the health, wellbeing and happiness of citizens, residents and visitors.

— With inputs from Reuters