Nakheel profits up

Surging property sales over the past year have contributed to a sharp increase in profits for Nakheel, the Dubai-based developer. The company announced yesterday that its net profit for the first half of this year soared to Dh2.83 billion (US$771 million), up from Dh121.1m in the same period last year. Nakheel said sales to external customers rose to Dh6.95bn, from Dh2.17bn a year earlier. The company said last month property sales this year were already three times more than the total for all of last year. Apartment sales made up 68 per cent of the total. The company released units in 13 staggered launches between Jan 1 and Aug 31, mainly in Badrah Manara, which accounted for 32.2 per cent of sales; the Lake District accounted for 15.2 per cent of sales and Al Furjan, 14.7 per cent.

"It's been a phenomenal year for Nakheel in terms of sales. As we announced at the end of August, our 2008 sales are already showing a three-fold increase on 2007's full-year figures, with more than 6,100 units either sold [97 per cent] or reserved [three per cent]," a Nakheel representative said. "Demand for our Dubai properties continues to rise across residential and commercial sectors. We see no signs of this demand abating"

The developer also announced in late August that a further 2,650 units would be released in 11 additional sales launches by the end of the year, including properties on Palm Jumeirah. Last week, Nakheel said it planned to build a kilometre-tall skyscraper that would surpass Emaar Properties' world's highest tower - which is nearing completion in Dubai - with an estimated value of Dh140bn, including the tower's surroundings.

Nakheel is one of the world's largest privately held property developers. "The international reputation and recognition of the brand has grown," said Vincent Easton, the sales director of Sherwoods, a property consultant in Dubai. "People around the world recognise Palm Jumeirah; it's a landmark." Mr Easton said the current global economic turmoil would not necessarily have a negative impact on Nakheel. "A slowdown is here. People are more selective - but this is where brands such as Nakheel and Emaar really come into their own. People are comfortable with brands."

Nakheel is behind a variety of new landmark property developments in Dubai, including The Palm, The World, Jumeirah Islands, Dubai Waterfront and Ibn Battuta Mall. On completion, the waterfront projects will have added more than 1,000km to Dubai's coastline. The commercial and tourism segments of the company are also growing. Planned tourism projects will include up to 250 new hotels, an increase of 50 per cent on the current number in the emirate. The Palm Jumeirah alone is more than doubling the number of beachfront hotels in Dubai, with more than 30 hotels and 14,000 rooms.

As Dubai's markets continue to mature and "purchasers become more selective about what they choose to buy, location will become even more key", said Manal Shaheen, the director of sales, marketing and customer service at Nakheel. "Purchasers are likely to see a greater return on investments if they buy near the waterfront and main transportation hubs. Nakheel is building to meet this need." [e-mail]