Ground broken on Palm Jumeirah townhouse project

Nakheel's new project on the Palm is expected to be completed in 18 months. Reuters

Nakheel yesterday broke ground on a townhouse project on the Palm Jumeirah as the developer revealed plans to launch the next phase of its Islamic bond to trade creditors by the end of this month. Palma Residences, the development, is Nakheel's first major project to be launched after its Dh60 million (US$16.3m) restructuring.

"We will be launching more and more projects after carefully evaluating all these projects," said Ali Rashid Lootah, the chairman of Nakheel.

Although sales of the 104 townhouses were launched only last week, Nakheel said it had already sold 30 units for a combined value of almost Dh223m. The prices range between Dh6m and Dh8m. The project has attracted buyers of various nationalities, most of whom are planning to live in the townhouses, Mr Lootah said.

The project is expected to be completed in 18 months. Dubai Civil Engineering has been appointed as the main contractor on the Palma Residences. The contract for the infrastructure and construction is worth Dh194m, Nakheel said.

"I think the recovery has started. We see the demand, especially on the high-end product," Mr Lootah said.

"Villas are moving. Prices are increasing on villas all across Dubai - rental and freehold. This is sign of a recovery, that usually the high-end property [will] start moving first. It's a classic example."

Nakheel is intending to issue a second tranche of a Dh4.8 billion sukuk soon, it said. "The second tranche I think will be launched at the end of this month," said Mr Lootah. "It will be all the same terms. Listing will be done as soon as possible." Nakheel is also expanding its retail operations, with plans to double the size of Ibn Battuta Mall and Dragon Mart. It is also planning to build a shopping, restaurant and marina complex called The Pointe, on the tip of the Palm Jumeirah.

The Palma Residences development replaced plans to berth the QE2 ocean liner off the man-made island.

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