A former executive at Dubai developer Nakheel has defended the ambitious body of projects that the company embarked on at the height of Dubai’s first property boom, saying it was a learning curve.
Abdulla Bin Sulayem, who now heads the family’s real estate and development firm Seven Tides, argued it readied Dubai for the current round of construction challenges.
“Obviously, any developer who goes through any phases goes through a learning curve,” he said in a wide-ranging interview published in Arabian Business.
“If you ask, was it too much? I would say no.”
Bin Sulayem, who is preparing to open Seven Tides’ newest venture, the Anantara Dubai Palm Jumeirah Resort and Spa on Sunday, pointed to the challenges of building the project to make his case.
“Today, the amount of units, apartments, there is a lack,” he said.
“We are facing sometimes challenges in finding good accommodation. For instance, this hotel, it was a challenge to find accommodation for the staff.
“So, if you think about it, if they haven’t built a lot back then it would have been ten times more challenging to find a decent place and a decent location.”
Bin Sulayem, who became Seven Tides CEO in 2010, worked on the Palm Deira project, which was eventually axed after Nakheel began to crumble under a growing mountain of debt. Other state-funded mega-projects by Nakheel such as Palm Jebel Ali and The World, a complex of man-made islands, were also sold to investors but later stalled.
“Palm Deira was interesting, it was the most challenging project at that time in Nakheel and the biggest man-made project island in the world,” Bin Sulayem, who was director of operations at Nakheel, said in the interview.
“So, for me, going through that project was maybe an once-in-a-lifetime opportunity where I can gain a lot of experience.”
Since restructuring in August 2011 under a government-led intervention, Nakheel has paid over $354 million (AED1.3bn) in loan interest and sukuk profit payments, as well as cash payments of around $3.08bn (AED11.3bn) to trade creditors and contractors.
It is also in talks regarding renegotiating the terms of its upcoming $8bn loan repayments and is in the black after posting a first-half net profit of AED1.2bn ($327m) and pursuing a new pipeline of projects, including three new hotels.
Bin Sulayem declined to comment on the criticism now leveled at Nakheel.
“It’s a different time now, things change,” he said.
“Obviously, the global crisis had an effect in different areas around the world. But, at the end of the day, as you can see, Dubai is heading already into a very positive trend.”
Bin Sulayem also believes there is room for some of the projects which stalled during the crisis to still go ahead, but doesn’t elaborate on which ones.
“The demand is there and especially the Expo 2020,” he said of the UAE’s bid to host the prestigious event.