Nakheel makes $57m sukuk payment

Dubai developer has paid US$2.6bn since 2009, sees stability in local property market

(AFP/Getty Images)

(AFP/Getty Images)

Nakheel Properties has made a AED210m (US$57m) payment to sukuk holders as part of its debt restructuring deal which repays trade creditors 40 percent in cash and 60 percent via the Islamic bond.

The sum takes the total amount paid to trade creditors to AED9.6bn (US$2.6bn) since November 2009, the developer said.

The Dubai-based real estate firm also said that property prices in Dubai are starting to show signs of stability.

“With this payment, Nakheel has paid a total of AED9.6bn to its trade creditors and contractors since November 2009, providing the necessary stimulus in the local economy, particularly in the real estate sector that is showing signs of stability and growth,” it said in a statement.

Nakheel, which overstretched itself with ambitious projects during Dubai’s property boom years, was taken under direct government control when real estate prices in the emirate crashed.

The firm narrowly missed a 2009 sukuk default after Abu Dhabi stepped in with a last-minute lifeline. Two other Nakheel sukuk, which matured in 2010 and 2011, were paid in full by Dubai.

The developer wrote off up to US$21.4bn of its real estate assets in the wake of the downturn but has started to show signs of a recovery amid a more stable real estate market.

Apartment sales in Dubai increased over 5 percent in the second quarter compared to the same period the previous year, according to real estate agent Knight Frank. Well-located developments such as Emirates Living and Downtown Dubai are expected to see increases of 5-8 percent quarter-on-quarter, said property consultants CBRE

Nakheel in October said its net profit for the first nine months of the year almost doubled to AED1.1bn, helped by property handovers and growing business in its retail and leasing segment. Revenue for the period was up to AED5.4bn, compared to AED2bn in the same period last year.

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