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Abu Dhabi, UAETuesday 11 December 2018

Nakheel's nine-month profit rises 2.5% on growth across business lines

The Palm Jumeirah developer says it will award more contracts by year-end

Nakheel expects to issue more contracts by the end of this year after signing more than Dh7bn worth of agreements so far this year. Nakheel
Nakheel expects to issue more contracts by the end of this year after signing more than Dh7bn worth of agreements so far this year. Nakheel

Nakheel, the property developer behind the Palm Jumeirah, said on Wednesday its net profit in the first nine months of this year rose 2.5 per cent year-on-year to Dh4 billion thanks to growth across its businesses.

The company’s businesses include residential development, hospitality, retail and leasing businesses. It did not provide a breakdown of revenue or profitability.

“The growth in our net profit signals stability and maturity in Dubai’s real estate market, and reflects our ongoing strategy to diversify our business in order to build a long-term, sustainable business and achieve our financial objectives,” said Nakheel chairman Ali Lootah in a statement.

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Nakheel expects to issue more contracts by the end of this year after signing more than Dh7bn worth of agreements so far this year, including a Dh4.2bn contract for Deira Mall, the centrepiece of Deira Islands, a 15.3 square kilometre waterfront city currently under construction in Dubai.

The company also awarded a Dh1.5bn contract for The Palm Gateway, a residential retail complex on Palm Jumeirah.

Nakheel has more than 23,200 residential units under development at several locations across Dubai, including Palm Jumeirah, Nad Al Sheba and Jumeirah Park. Its current and future retail portfolio encompasses over 17 million sq ft of leasable space, including 13 million under development. It currently has 17 hotels and serviced apartment complexes with 6,000 rooms, two of which are open, in addition to a number of clubs and restaurants.

In the first half of this year, Nakheel posted a 10.5 per cent decline in net profit but affirmed its confidence in meeting full-year forecasts.

The developer currently has Dh50bn worth of projects under construction, it said in September.

Property developers are forging ahead with project despite falls in prices and rents.

Property rental rates in Dubai continued to come under pressure during the third quarter and further falls are expected during the rest of the year, according to broker Asteco.

Average rental rates for apartments fell 4 per cent during the three months to the end of September, while villa rentals dropped 3 per cent on average, the broker said.

This follows a fall in rents throughout 2017, as thousands of new properties have come on to the market amid job losses and lower housing allowances.