More projects to move into building phase over next year
Local developer Nakheel spent nearly AED6bn ($1.6bn) on construction projects in Dubai over the past two years.
From May 2014 to April 2016, the firm says it spent about AED5.9bn, meaning an average monthly spend of AED234m.
The company is developing a variety of projects across Dubai. These schemes include villas, apartment buildings, retail centres and hotels. The largest schemes include a major expansion to Dragon Mart, Ibn Battuta Mall and Nakheel Mall on Palm Jumeirah.
We spend a lot of money every year on construction, Nakheel chairman Ali Rashid Lootah tells MEED.
He says the large volume of work the developer is undertaking, combined with good payment terms, means many construction companies want to work on its projects.
When it comes to payment we have no issue, says Lootah. Contractors keep working with us because we are a good paymaster. We see interest [from contractors] when collecting new tenders.
Nakheel is expected to start work on new schemes later this year and in 2017. The developer plans to launch new projects for sale in the second half of this year as Dubais property market shows signs of resurgence.
We had a correction for sure, but nothing drastic, says Lootah. It was a healthy correction. We expect things to pick up in the second half.
Nakheel is also preparing to start construction work on large schemes for its own leasing portfolio. The largest is the Jebel Ali Gardens development in the Dubai Waterfront area close to the Jebel Ali port.
The basic infrastructure design is progressing, we completed the basic concept, we are appointing a consultant to do the design [for the buildings] and then we will tender it, says Lootah.
Once complete, the community will provide accommodation for more than 40,000 people in 10,000 apartments spread across 42 buildings.
Nakheel makes another big call on Dubai property
Nakheel profits continue to grow
Nakheel chairman Ali Rashid Lootah has made some big calls over the past five years. In late 2011, the Dubai developer appeared to be overwhelmed with debt and unlikely to develop any new projects ever again. But Lootah decided that Dubais property market had bottomed out and he decided to launch new development projects.
The decision to start new schemes facilitated one of the greatest corporate reversals of fortunes in recent times. The new projects, together with the handover of existing schemes, allowed Nakheel to announce just three years later that it was free of bank debt. Five years later, in August this year, the firm will be completely debt-free when it repays its trade investor sukuk (Islamic bond). Read more