Nakheel focuses on stable growth

31 December 2013

New hotel and shopping mall projects will be a priority for the Dubai-based developer Nakheel this year

The year ahead will be special for Nakheel chairman Ali Rashid Lootah, as his plans to turn around the fortunes of the Dubai-based developer start producing long-lasting results.

When the market reached its bottom in 2011, Lootah made the brave decision to move ahead with new projects. After being initially challenged for making that decision, he is now preparing to see the first of the new schemes completed and handed over in 2014.

Today, the decision to build more property developments in Dubai is a far more compelling one and Nakheel is planning to tender more than AED6bn ($1.6bn) of construction work during the year. Buoyed by the successful Expo 2020 bid in November 2013, the emirate’s real estate market is thriving once again, and with double-digit growth over the past 12 months, many firms have followed Nakheel’s lead and have started building new projects.

The spike in prices has led to inevitable concerns that another speculative bubble is forming and that the market is heading for another crash once the Expo event is held in 2020. Although this theory is dismissed by realtors in Dubai, the prospect of history repeating itself is a very real one.

To safeguard itself from any potential fall in property prices, Nakheel is working on schemes that will give it access to more stable revenue streams from hospitality and retail properties. These new hotels and shopping malls will be a priority for the developer in 2014.

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