Indebted Nakheel pockets $114m from land sales

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Nakheel said it closed land sales worth AED419m (US$114m) relating to plots on its Palm Jumeirah and Jumeirah Village Circle developments.

Nakheel said it closed land sales worth AED419m (US$114m) relating to plots on its Palm Jumeirah and Jumeirah Village Circle developments.

Indebted Dubai real estate firm Nakheel said on Monday it closed land sales worth AED419m (US$114m) relating to plots on its Palm Jumeirah and Jumeirah Village Circle developments.

The master developer, which was taken under direct government control following Dubai’s 2008-2009 property downturn, said that investors were “clamouring” to purchase plots at its Jumeirah Village Circle project.

On its man-made Palm Jumeirah development, Nakheel said it closed a deal for a 155,000 sqft residential plot on the Palm’s ‘trunk’ for AED202m and a 72,000 sqft residential villa plot worth AED104.4m.

Nakheel said it also sold 122 residential plots in Jumeirah Village Circle, a 860-hectare master development south of Al Khail Road, for approximately AED113m.

“After the recent success of our Jumeirah Park villa launch, Nakheel has seen investors clamouring for the newly released plots in Jumeirah Village Circle,” said Nakheel chairman Ali Rashid Lootah.

“This reveals a very clear message: confidence in Nakheel - and Dubai - is back,” he added.

Last month Nakheel said its net profit for the first nine months of the year almost doubled to AED1.1bn on the back of increased transactions in its retail and leasing businesses.

Revenue for the period was up to AED5.4bn compared to AED2bn in the same period last year.

So far this year, the developer has repaid about AED9.4bn to its trade creditors following the agreement of a US$16bn debt restructuring plan in 2011.

Click here to see how the crash hit property prices on the Palm Jumeirah

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Posted by: Red Snappa

It's going to take an awful lot of slices of $114 million to keep the company going operationally, invest in new projects and pay off $16.1 billion simultaneously.

Land sales are finite. And Dubai is nowhere near "back" in the same old prolific money spinning, 'streets paved with gold' sense of the property sector as was, in first-half 2008. We're still talking about not reaching any real 'reasonable' industry driving level of recovery before 2015/2016.

There are just too many negative economic factors in the rest of the world not to affect the UAE property sector in some way or other, also the market is deteriorating in Abu Dhabi. Also the continuing political furore in some Gulf states, the tragic conflict in the Levant and another equally dangerous confrontation in Gaza, both with links back to Iran, cannot help but have an effect on business.

Thus a sense of realism is required right now more than ever, rather than overselling the situation.

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