Nakheel reveals Dhs2 billion profit

Dubai developer Nakheel has announced it made more than Dhs2 billion in profits last year - as the firm’s chairman said it is currently handing over new units at a rate of “15 to 20 a day”.

The firm behind the emirate’s iconic Palm Jumeirah and other major projects yesterday sought to show that it is charting a stable course after its well-documented problems when Dubai’s real estate industry was hit hard at the outbreak of the global financial crisis.

With property prices on the rise in many areas of the emirate once again, the firm announced yesterday that it posted profits of Dhs2.017 billion for 2012 - up 57 per cent on 2011.

Revenues were up 91 per cent to Dhs7.8 billion from Dhs4.1 billion the year before, and Nakheel chairman Ali Rashid Lootah yesterday hailed what he called “impressive results”.

The firm also appears to have little to fear from a proposed cap on mortgage lending in the UAE - an issue that has shaken market confidence in the early weeks of 2013 - as it emerged that more than 90 per cent of Nakheel’s buyers pay in cash.

Asked if the proportion of buyers that require a mortgage to buy a Nakheel property was around 10 per cent, Lootah responded: “Not even that”.

On reports that the UAE plans to cap mortgage lending at 70 per cent of a property’s value for Emiratis and 50 per cent for expats - which the Central Bank appeared to back away from this week - Lootah said:

“They should have consulted with the banks, I think, before they issued that - and what they are doing now is the correct step”.

He said the issue “should be clarified” for the sake of UAE real estate market.

He also played down fears that Nakheel may struggle to meet its obligations under a Dhs4.2 billion Islamic bond due in 2016 - after financial analyst Exotix cut its rating of the bond.

“The company is doing well. The results speak for themselves,” Lootah said, adding that it could take advantage of more favourable investor sentiment to refinance its debts at rates more agreeable to the company.

The firm plans to hand over about 3,000 units to customers in 2013 and expand Ibn Battuta Mall.

However Lootah said there were no plans for significant work on its Palm Jebel Ali, Palm Deira or its Nakheel Waterfront projects, calling the latter a “long-term” project.

mark.summers@7days.ae