Nakheel unveils first new Palm project since Dubai crash

Nakheel, Dubai’s biggest developer, plans to start its first new project on the Palm Jumeirah artificial island since the company received a government bailout in 2009.

The Pointe at Palm Jumeirah [photos] will include shops, computer- controlled fountains, a marina and a public walk on the tip of the palm-shaped island, Chairman Ali Rashed Lootah said at a press conference today. Nakheel is in talks with banks to raise at least AED300m ($82m) for the project, which will be operated by the company when it’s completed.

[Click here for a virtual tour of the planned development]

“The retail sector is strategic for Nakheel,” Lootah said, adding the company is looking to increase its sources of recurring income.

Developers in the United Arab Emirates, which includes Dubai and Abu Dhabi, canceled or postponed more than $500bn worth of planned construction work since the property market crashed in 2009. Projects on hold include Nakheel’s Palm Jebel Ali and Palm Deira islands as well as most of its world map-shaped island chain.

Nakheel wrote down the value of its real estate by AED78.6bn after the credit crisis caused the emirate’s speculation-driven property market to collapse. The company received an $8.6bn bailout from Dubai’s government as part of a $10.5bn debt restructuring that included issuing an Islamic bond, or sukuk, to repay trade creditors.

Nakheel plans to issue an Islamic bond, or sukuk, before June to settle claims by contractors, Lootah said today. The value won’t exceed AED1bn , he said.

The Pointe [photos], located across the water from the Atlantis hotel, will include 120 restaurants, 75 shops and landscaped areas for visitors with a view of the offshore fountain.

The plan includes a new station for the monorail running up the center of the palm-shaped island and parking for 1,200 cars.

While demand for housing in Dubai has waned and values have dropped by more than 60 percent, retail has been one of the bright spots of Dubai’s property market.

Lootah said 60 percent of an extension to Nakheel’s Dragon Mart mall was booked by renters within a week of its announcement.

“They didn’t just book the space, they also paid deposits,” he said. “That shows there is demand.”

Nakheel expects the new project to be completed in about 18 months, Lootah said today. Nakheel hasn’t decided whether to borrow or raise funds by issuing bonds for the development, he said.