By Andy Sambidge
Dubai developer says sale indicates 'clear signs of renewed confidence' - report
Dubai developer Nakheel said on Sunday it had sold a plot of land on Palm Jumeirah for AED400m ($109m).
The 305,704 sq ft plot was bought by a local investor the company didn’t identify, Bloomberg reported.
Nakheel said the sale showed there were "clear signs of renewed investor confidence in Dubai real estate and in particular for unique products such as those offered on Palm Jumeirah".
“We have seen a very healthy demand in the first half of 2012, and this looks set to continue for the year,” said the developer in a statement cited by Bloomberg.
Last month, the state-owned developer said its first-half profits jumped 36 percent, buoyed by property handovers on several projects.
The developer reported net profit was AED767m ($208.82m) in the first six months of the year, up from AED562m in the year-ago period.
Revenues rose to AED3.1bn in the first half, up 112 percent from the corresponding period a year ago, it said in a statement.
It said in August 2011 it was restructuring some AED59bn of liabilities, including AED32bn to Dubai government, AED19bn to trade creditors and AED8bn to banks.
As part of the restructuring, the company, which was previously the property arm of Dubai World, is now controlled by the Dubai government, along with another debt-ridden property firm Limitless.
Good! Now perhaps Nakheel can pay some of its contractors, who in turn will pay their staff (and ex-staff) looooong overdue salaries!
What happens to Nakheel's revenue profile when the plots run out?
Selling land is a finite opportunity, once it's gone it's gone. This type of transaction is perhaps not indicative of the road to recovery but the need for cashflow, obviously the quickest route to realising ready money as opposed to developing.
On the subject of settlement of contractor dues raised by a fellow contributor, good point by the way, wasn't it a fact that the land collateral put up against repayment of debt resided on the ocean floor, perhaps plots like this might have offered significantly more security. There are of course still The Waterfront sites to dispose of! I imagine The World islands are shedding value on a weekly basis.
The headline shows even AB's doubt that this is true. Was this a robbing Peter to pay Paul exercise. If it is genuine, which is unlikely, Nakheel should divulge more about the sale, identify the piece of land and learn a few fundamentals of good corporate governance. Like telling the truth, for one.
I second that !
i believe that selling land will be maybe one of the only ways for nakheel to make money. who would ever trust them again? especially with such silly statements earlier about contractors having to be reasonable and write off 85% of their money...
This article title should be Nakheel lost the plot after all their bad behaviour and unethical business models. Dubai developers have obviously a long way to go to become good companies that people can trust and do business with. The Nakheel and Dubai Properties syndrome will be hard to cure.
Is this true or is it the usual PR from a real estate company ? Probably explains why their leasing section has withdrawn the rental offers in DG and hiked rents without any advance notice to tenants (clients). Oh by the way, rents are not hiked, only offers have been withdrawn by management, not very convincing argument. If I paid x last year, and this year am paying x+ ... , for me it is an increase, right ? Or is my math that bad ? Oh and please, no comments like if you dont like it, leave it, be original.
What is crystal clear from this article and the steady flow of faux positive news from Nakheel is they don't have a PR strategy beyond make believe.