Ali Rashid Lootah, chairman of Dubai developer Nakheel, denied he had been appointed to clear up the financial mess left by his predecessors during the financial crisis and is aiming to restart work on its major manmade island master developments in a bid to "put everything back together.”
“We’ve had a tough few years but we have recovered,” Lootah said in an interview with The Sunday Times newspaper. “This is new Dubai and new Nakheel... We have lots under construction and more to be built.”
The report said Nakheel plans to deliver 4,860 homes worth a total of $3.6bn over the next three years, at developments such as Azure Residences, Club Vista Mare and The Pointe.
Lootah, who revealed he was not paid to be chairman of the state-backed company, denied he had been brought in to clean up the company's finances in the wake of the 2008 property crisis: “I am not the clean-up guy. I am the put-everything-back-together guy.”
Famous for its lavish master projects, work is scheduled to restart on its biggest manmade palm island, the Palm Deira, which was started during in 2007 but was mothballed during the downturn in 2008, which saw prices fall by up 60 percent and around half of projects stalled or cancelled.
Its other high profile manmade projects – The World and Palm Jebel Ali – will also be restarted soon once the market recovers fully, with 70 percent of the islands on The World already sold, Lootah said.
The state-backed developer restructured $16bn worth of debt in 2011 and since then it has delivered 7,000 of the 8,000 homes it promised. “We promised $2.7bn of property. We have delivered more than $2bn,” he said.
After negotiating with creditors, Lootah said around $3.5bn in debt “will be paid off within five years”, mainly on the back or rising profits, which rose 50 percent to $482m in the first nine months of 2013.
“Dubai has recovered much faster than any other part of the world because there is no alternative to it in this region,” Lootah said.
The news comes amid a resurgence in interest in Dubai real estate. During the first half of 2013, AED53bn($14.4bn) worth of real estate investments was sold in Dubai. Arab investors contributed approximately AED5bn, a 111 percent increase in spending, while Gulf nationals spent over AED16bn, a 57 percent rise. The official figures showed that foreign investors remained the biggest spenders with over AED32bn - a 73 percent increase on the same period last year.
In terms of price increases, a Cluttons report for Q3 said average capital values continued to rise by 8 percent, albeit more slowly than the record 23 percent growth experienced during Q2. Prices have not yet recovered to previous highs and despite the recent gains, on average, are still 26 percent below the Q3 2008 market peak. However, prices are now 47 percent above the bottom of the market, which was reached in Q2 2009. Year on year, values are 53 percent up on this time last year.
Last week, Dubai won the right to host the World Expo 2020 and in Nakheel pledged to deliver a range of "innovations, sustainable destination developments" in the run up to the event in seven years.
"We will be honoured and proud to play our part in the delivery of World Expo 2020, which will promote and celebrate innovation, creativity and cultural diversity while encouraging global co-operation to introduce effective solutions for the challenges facing society," Lootah said.
Among Nakheel's pipeline of projects is Deira Islands, a four-island, mixed-use waterfront development that will add more than 40km to Dubai's existing coastline and provide infrastructure for the development of dozens of hotels and resorts, serviced apartments, retail centres and individual homes.
The project will contribute significantly to the Government of Dubai's tourism strategy, with Nakheel offering special payment plans and incentives for hotels to develop on the islands, the developer said.
Nakheel itself will develop the whole of the south island, creating a unique creek side destination, it added, saying the island will include a night market in the style of an Arabic souk; a 250-room hotel; an amphitheatre for 30,000 people; and a marina that can accommodate large yachts. The island will also have a number of waterfront plots for hotels, resorts and serviced apartments.
The other three islands will feature hotels, resorts and residential, commercial and retail units. Nakheel will master plan and complete infrastructure work ready for third party development on each island.
Nakheel said it is also continuing to enhance its flagship project - Palm Jumeirah - with several new projects underway or in the pipeline including Palm Jumeirah Boardwalk; Palm West Beach; Nakheel Mall and Hotel; The Pointe and a number of residential units on the world-famous island.
* Nakheel no longer responds to media enquiries from Arabian Business, nor does it grant Arabian Business access to any of its media events or announcements.