Nakheel plans ‘huge’ increase in contracts awarded for next year

The developer wants to tap debt markets to finance its projects.

A model of Nakheel’s Palm 360 project, a 220 metre-high hotel and residential tower complex, at this year’s Cityscape Global exhibition in September. Satish Kumar / The National

The Dubai-based developer Nakheel has confirmed that it is planning to award contracts worth at least Dh10 billion next year, a 66 per cent increase from this year.

A spokesman for the developer confirmed that main contracts that are anticipated to be awarded within the next 12 months include one to build a Dh3.67bn, 600,000 square metre mall likely to be a key feature of the Deira Islands project; the Dh7.5bn Jebel Ali Gardens site with up to 10,000 apartments in 42 buildings; and a contract for Palm 360 – a 220 metre-high hotel and residential tower complex unveiled in September at this year’s Cityscape Global show.

Next year’s programme is also likely to include an award for the Palm Gateway complex of three residential towers that will sit atop the Palm Monorail station at the entrance to Palm Jumeirah. A Dh1.4bn contract for this project was initially granted in February this year to a joint venture between South Korea’s Ssangyong Engineering & Construction and China State Construction Engineering Corporation but this was subsequently rescinded and the project re-tendered. A new deal is expected to be agreed next year.

Nakheel awarded Dh6bn worth of contracts this year, which included Dh2.3bn worth of awards for retail projects such as the Deira Islands Night Souk, Warsan Souk, the new Circle Mall in Jumeirah Village Circle and an extension of Dragon City.

Speaking to Middle East Economic Digest (Meed), Nakheel’s chairman, Ali Rashid Lootah, said that it is likely to finance new projects through increased debt issuance. “We will be borrowing for sure. We have a huge number of projects and we need financing. Banks are more than willing to deal with us,” he said.

In August, Nakheel said that it repaid a Dh4.4bn sukuk that Mr Lootah said had effectively drawn a line under a five-year financial restructuring that began in 2011. The deal allows it to tap debt markets once more to finance its ambitious construction programme. Mr Lootah had said it was “in serious discussions with different lenders” following the repayment.

In October, the company said that net profit for the first nine months of this year rose by 39 per cent year on year to Dh3.61bn.

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