By Staff writer
Dubai’s largest developer has vowed to complete 7,982 homes by end-2012
State-backed developer Nakheel has handed over more than 1,180 homes across Dubai in the last 18 months as the firm’s focus shifts from construction to the completion of existing projects.
Dubai’s largest developer said Sunday that 700 units in its Marina Residences project had been handed over to buyers, alongside 100 apartments in its Masakin Al Furjan development.
Some 130 homes in the Discovery Gardens complex had also been released to buyers, Nakheel said in an emailed statement, alongside 256 homes in the stalled Jumeirah Village development.
The next project slated for delivery is the Emarati cluster in International City. Nakheel expects to handover over 1,663 units to buyers by the year-end, the statement said.
The property developer behind the palm-shaped islands off Dubai’s coast pledged in August to deliver 7,982 homes in nine developments across the city in the 15 months ending Dec 2012, in areas including Jumeirah Islands, Al Furjan and the Waterfront project.
Nakheel was one of the biggest casualties of Dubai’s real estate crash, suspending at least 100 projects in the wake of a property collapse that more than halved house prices in the emirate.
The emirate saw one of the world’s biggest reversals of fortune following the global credit crunch three years ago, forcing Nakheel to reduce staff and halt work on projects including the man-made islands of Deira and Jebel Ali.
The developer, which split from its parent firm Dubai World in August to become a government entity, said this month it wrote down AED78.6bn ($21.4bn) from the value of its real estate.
Nakheel wrote off AED301.4m in the first half of last year, AED73.8bn in 2009 and a further AED4.44bn in 2008, the company said in an Islamic bond prospectus.
To reduce costs, the developer cut its workforce to 986 in March 2011 from 3,818 in October 2008, the prospectus said. Nakheel expects to spend AED7.4bn this year and another AED1.4bin 2012 to complete nine projects across Dubai.
Nakheel said August 24 it was restructuring some AED59bn ($16.1bn) of liabilities, including AED32bn to Dubai government, AED19bn to trade creditors and AED8bn to banks.
The developer also said it would issue the first tranche of a twice-delayed AED4.8bn Islamic bond to trade creditors at a profit rate of 10 percent.
The company offered trade creditors repayment of 40 percent cash and the remaining 60 percent in the form of an Islamic bond, or sukuk as part of its restructuring program.
Dubai’s property prices are expected to drop further as 54,000 homes will come onto the market from 2011 to 2015, Jones Lang LaSalle estimates. That’s about 15 percent to 20 percent of the existing supply, according to the real-estate broker.
Some 130 homes in the Discovery Gardens complex...
considering that this project is complete since 2008, that's a record! And what about saying that every car park has a hole as they are still digging for some maintenance, no pool is open, no security, poor gardening and if you drive through it looks like a little Deira...
If they DELIVER like this, it's better they don't deliver at all!So, next time, why don't we say also the truth, instead of saying that 130 homes were delivered in Discovery Gardens?
Another 8,000 properties in 15 months, one assumes that most owners will choose to live in these homes rather than rent them out, as rents get lower. Presumably Nakheel receives 8,000 final payments at 2008 prices? Then that is another 8,000 formerly rented properties empty!
The number of executives entering the country for employment who are liable to be in a position to rent the rising quantity and type of empty residential property, cannot come close to the existing Dubai inventory, never mind Dubai present day PLUS 54,000 extra units. Add in a percentage coming out of a partial restoration of Dubailand projects predicted but unquantified as yet by Dubai Properties to exacerbate the oversupply.
The only answer to the current woes of the property market as it stands is to just stop building! Otherwise there will be so many buildings with an increasingly lower percentage of units sold?