Nakheel's profit rise signals confidence in Dubai property

Dubai property developer Nakheel, one of the biggest casualties of the emirate’s real estate market crash in 2009, posted a 57 percent jump in net profit for the first six months as Dubai’s real estate recovery boosted performance.

Dubai real estate prices slumped by more than 50 percent from their 2008 peak in the aftermath of the emirate’s property bubble bursting, but have shown signs in recent months of recovering some of the lost ground.

The firm, which was taken over by the government as part of its $16 billion dollar restructuring plan completed in 2001, made a net profit of 1.2bn dirhams ($326.7 million) in the first half of the year, versus 767m dirhams in the corresponding period of 2012, a statement said on Tuesday.

Revenue also jumped 36 percent in the first six months to 4.23bn dirhams. It handed over 1,400 properties in that period.

The company’s performance showed the continuing growth and strengthening of the real estate market in Dubai, and the return of investor confidence and trust in Nakheel and its projects, it said in Tuesday’s statement.

In April, the REIDIN general residential sale index showed the villa sale price index and the apartment sale price index increased by 17 percent and 18 percent year-on-year respectively.

New projects have also been launched in a sign of renewed confidence in the sector. Emaar Properties and Meraas Holding formed a joint venture to build a huge residential and commercial area near the city’s downtown at the beginning of June.

Nakheel is negotiating with lenders to refinance loans worth 8bn dirhams that are due in 2015 and were part of its original multi-billion dollar debt restructuring, Chairman Ali Rashid Lootah said last month.