Nakheel expects 15% rise in profit in 2014; IPO on cards

Developer to start leasing 94 hotels and resort plots on revamped Deira Islands project for sale on March 30.

Nakheel expects a 15 per cent growth in its annual profit in 2014 and also considers launching an initial public offering (IPO), its chairman Ali Rashid Lootah told reporters at a news conference on Wednesday.

The conference was held to announce its plans to release 94 hotels and resort plots on its revamped Deira Islands project for sale on March 30 as part of a major new push into hospitality and retail sectors.

“Our profit will be better than last year. We are targeting 15 per cent growth,” Lootah said.

A quick recovery in property sector in Dubai helped Nakheel to earn an annual profit of Dh2.57 billion in 2013, recording a 27 per cent growth over previous year.

Lootah said that Nakheel was currently in the early stages of planning the IPO, and that it would take place after all of Nakheel’s debts were paid off.

Declining to disclose whether any specific unit within the company would be listed, he said: “Anything is possible.”

The chairman expects that the company’s leasing business will generate Dh1.2 billion revenue in 2014 and triple this income to more than Dh3 billion by 2016.

“It’s our strategy to build more cash generating assets, we will still be developing but we will be focusing more and more on that,” Lootah explained. Nakheel also announced two new shopping malls in its Jumeirah Village community as part of efforts to boost its retail offering.

The malls include a one million square feetregional shopping mall in Jumeirah Village Triangle and a 500,000 square feet mall in Jumeirah Village Circle.

Deira Islands

Nakheel will launch on Sunday more than 12.4 million square feet of prime land at Deira Islands, its new, 15.3 square kilometre waterfront city that will help Dubai deliver its vision for 2020.

Nakheel chairman declined to reveal how much money Nakheel expects to raise from the land sales. The company’s own developments on the first two islands will include a night market, a mall, four hotels and one resort and will be completed by the end of 2017, Lootah said.

The master developer is releasing its first phase of plots — ranging from 50,000 to 670,000 square feet — for hotel and resort development on two of the four islands that make up the project. In the first phase 94 plots are available, with special payment plans for investors in hotel and resort projects. The two islands will ultimately add over 23,000 hotel keys and 31,000 apartment keys to Dubai’s hospitality and residential landscape.

He mentioned that Nakheel has prime location and there is huge demand for three and four stars hotels on waterfronts.

He also disclosed that Nakheel is planning to build another vast mall project at an undisclosed location.

Nakheel intends to build five hotels of its own on the Deira Islands and the developer could operate as many as 10 hotels by the end of the decade, according to the chairman.

All four of the revamped Deira islands are expected to include resorts, apartments and shops.

Lootah said: “We are honoured and proud to play our part in realising Dubai’s vision for 2020. Nakheel has already delivered some of the world’s most famous landmark developments — including Palm Jumeirah and The World — that have helped to place Dubai firmly on the map.” abdulbasit@khaleejtimes.com