x Abu Dhabi, UAEThursday 20 July 2017

Dubai developer Nakheel 'is building back the trust' says chairman

Ali Rashid Lootah, the chairman of Nakheel, hopes that this Cityscape he is finally able to convince the property-buying public to put their trust back in his company.

Ali Rashid Lootah, the chairman of Nakheel, says he has plans to grow the company once the market recovers. Sarah Dea / The National
Ali Rashid Lootah, the chairman of Nakheel, says he has plans to grow the company once the market recovers. Sarah Dea / The National

Ali Rashid Lootah, the chairman of the Dubai developer Nakheel, hopes with this year's Cityscape in the emirate he is finally able to convince the property-buying public to put their trust back in his company.

As there were long lines of more than 120 people outside his sales office hoping to get their hands on new villas at the Jumeirah Park scheme this week, it looks like he might succeed.

The developer took deposits for 202 of 360 villas at the scheme with a total value of Dh888 million (US$241.7m). For Mr Lootah it is a promising sign the work he has put in for the past two years is finally paying off.

"Frankly speaking, the biggest challenge was trying to comfort the investors that we will deliver to them their investment," he says, relaxing on a plush sofa in his office at the Nakheel sales centre in Dubai.

"So, to me, that's a sign of trust and the important thing is - and the best sign of trust from the investors' side - is people now buying again from Nakheel."

Rebuilding trust in the master developer behind the 2009 Dubai World crisis is no easy task. Many investors who bought into Nakheel schemes in the boom days have been left out of pocket because of a string of cancelled projects - ending in litigation at the Dubai World Tribunal in a number of cases.

"My priority was the investors because they are the small, small people," says Mr Lootah. "Lenders and banks we have already made a deal with them. Contractors we made a deal with them; they are happy. And so it is the investors. And still, around 75 per cent or 74 per cent of cases we managed to resolve amicably - without litigation, without anything."

The appointment two years ago of Mr Lootah, a Dubai-born engineer, during a time of restructuring was seen by many in the market as a sign the company would roll up its sleeves and get things done - even if it had to step on a few toes along the way.

When asked whether the company could have done things differently, Mr Lootah is clear. "Well, there was no other option. We gave the people the choice. They have to wait until the end of the restructuring period and they get their money in full and I think really the Government have provided a great job by supporting the company."

Although Nakheel is only part of the way through a restructuring plan it agreed to with its lenders last year and which is set to run until August 2016, it has launched at least three housing schemes - the Palm Residences, the Palm Views and Jumeirah Park legacy villas - as well as extensions to its Dragon Mall and Ibn Battuta Mall.

The chairman says out of the total Dh9.9 billion of advances it received from customers who have yet to receive their properties, about Dh7.2bn to Dh7.3bn is "already sorted out".

To do this the company has followed its firm restructuring plan, says Mr Lootah, consolidating the wild and wacky projects of the boom time into an achievable target of delivering 8,000 homes. Already, he says, the developer has delivered 5,000 of these homes and the rest are being handed over "on a daily basis".

To say the global financial crisis decimated Nakheel is no exaggeration. The company went from employing about 4,400 people during the boom times to just 900 today.

However, as the market recovers, Mr Lootah says Nakheel has plans to grow again.

"Nakheel is here to stay and Nakheel will continue to grow, locally and hopefully internationally," he says. "I think the number of people will increase but I don't know if it will be the same size as before."

The chairman, who starts each day at 5.30am with a brisk 6km walk, says the company is in negotiations with developers "from more than one country" about the possibility of expanding overseas.

"It's a commercial decision at the end of the day but we have to grow and we will continue growing," says Mr Lootah.

"Dubai is our core business but we have to grow outside if there is an opportunity."

lbarnard@thenational.ae