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Nakheel back in business

Nakheel will remain focused on expansion of existing projects and announce new developments later this year following a successful restructuring of the company, its top official said.

The region’s premier property developer announced plans to strengthen its retail and hospitality business by launching two hotels in Dubai to cash in on the boom in tourism sector. The developer is in the process to appoint the operator for new hotel projects, which are expected to be announced officially soon.

The builder of the world’s famous islands of Palm Jumeirah also plans to build another community centre comprising a huge park, clubs, food and beverage outlets and walks in International City by 2014.

“We will continue to launch new projects following a strong recovery in Dubai real estate markets,” Ali Rashid Lootah, Chairman of Nakheel, told a select group of journalists at his office on Wednesday.

He said Nakheel is on growth path and will post strong results in line with the first-half performance as investors’ confidence returns to the market.

“We have received nine bids from contractors for Jumeirah Park development and it’s a clear sign of trust in Nakheel and its properties,” he said, adding that the developer has awarded fresh contracts worth Dh1.52 billion to contractors to ensure timely completion of existing projects and new developments including the expansion of Dragon Mart and Ibn Battuta Mall. “We will have a bigger Ibn Battuta Mall by first quarter of 2015,” he said.

Ali Rashid Lootah talking to journalist. — KT photo by Mukesh Kamal

“We are evaluating a number of developments that will add value to existing communities and pave the way for a more sustainable long-term viable business in post-restructuring period,” he said, and adding that the company is also developing eight parks to serve the communities in Dubai.

In reply to a question about the Dh2.5 billion Nakheel Mall and Hotel project, he said its tendering procedure is underway and the construction will start this year. “The mega development will be completed in two-and-half years period,” he said, adding that the work on The Pointe will also start this year as it has awarded the contract for 136,000-square metre retail and entertainment complex on Palm Jumeirah.

Dh5.1 billion sales

Lootah said Nakheel has recorded Dh5.1 billion in sales revenue this year so far and it is confident of closing 2013 on a high note by delivering 3,000 near-term units. Moreover, the company sold 1,068 new units including 981 villas and town houses, he said. “We also generated Dh1.6 billion in land sales by selling villa plots,” he said.

He said Nakheel’s debt liabilities shrank to Dh2.3 billion from 2010 peak levels of Dh9.9 billion as it had amicably settled Dh7.6 billion with its customers in the past two and half years.

To a question about the progress in talks with banks to refinance Dh8 billion ($2.2 billion) loans due in 2015, he said the company is still negotiating terms and conditions with the lenders to close ‘a favourable deal’.

“We are engaged with three local and international banks to refinance Dh8 billion loan for an extended period. The banks are taking longer time, but we have enough time to conclude the deal,” he said.

In reply to a question about the settlement with trade creditors and contractors, he said: “Nakheel did a good job by settling Dh6.5 billion claims out of Dh8 billion and the remaining Dh1.5 billion claims are likely to be settled by first quarter of 2014.”

“Amicable solution of 100 per cent claims is a big achievement. It’s a closed chapter now,” he said. About the legal cases involving Nakheel, he said the developer is facing only 88 disputes while dealing approximately 22,000 customers across its wide array of residential, retail leisure and hospitality segments.

“Nakheel is starting a fresh journey, thanks to its partners, contractors and trade creditors. Legal disputes are even less than half per cent of the total customers,” he said.

World Islands

Lootah said work on ‘The World Islands’ development is expected to start by next year as investors renewed their interest in mega development.

“We are in talks with two new Gulf-based investors, who are interested in acquiring properties in the project comprising of 300 islands,” he said and declined to share further details.

“It will take another nine months to one year to start work on the project. Hopefully, the work will begin within the first half of next year.”

To a question, he said the developer has completed Dhs924 million worth of settlements with investors on the project in the last six months.

He said the developer has drastically reduced service charges in its various developments to facilitate the residents.

— muzaffarrizvi@khaleejtimes.com