Developer seeking $81.7m in capital for new residential, retail project called ‘The Pointe’
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.
“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 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.
with nakheel's latest legal disputes with customers, ex CEO, etc, i don;t believe they will receive a good respond or finance option.
So many buyers and tenants will be queuing up around the block to get a slice of the action. Such a great reputation!
Odd strategy and inopportune time to announce it. I thought that Nakheel had already restructured debt with most banks. With the current oversupply retail and residential, extremely bad press from a corporate perspective and a major confrontation with the Iranians brewing offshore, would even a government sponsored local bank be totally enthusiastic about lending on a property project? Will this be a Tayseer project, adding to the 40 or so already on the books?
A completion date of 2013 is too early, still only part way along the road to recovery in the property sector. Completion in 2016 would feel more appropriate as it offers greater time to absorb properties and restore the master developers reputation already on the market . Recognising that by its very nature a developer must keep building for the firm to keep going or close!
However, heavy debts mean that realistically a firm is in negative financial territory for many years to come, like countries reducing a budget deficit.
I think they should focus on cleaning up the mess they have, before they embark on any other project. This is typical of companies here!
I dont think anyone in his right mind would want to get involved or purchase anything form them. God knows what "hidden" surprises lurk.
Besides...arent they in debt? Who would offer financing???
What is the pointe????
Do you see what I did there....
This announcement makes it even more unbelievable that Nakheel has recently so destroyed its relations with the majority of its residents in the Palm Jumeirah Shoreline Apartments, by incredibly unreasonable behavior towards the residents.
Nakheel have: vastly increased Palm "service" charges, poor maintenance of buildings, attempted to sieze common areas from ownership of the residents under original purchase agreements, Dh200 charge for visitors to accompany you to your beach bar, Dh200 for childminder to take kids to playground, quickly calling Dubai Police on residents. Yes this is all still happening right now!
With all this I cannot imagine how any buyer will ever trust Nakheel, under its current management, with a purchase of a new property. Most of us on the Palm Shoreline Apartments used to love our location, but now we are mostly trying to get away from Nakheel properties ASAP. My message to Nakheel - Buyers DO use Google!
Please complete your existing projects properly first and then undertake new ones.
A resident of Jumeirah Village Triangle
Nakheel has been plain nasty to it's customers. That apart this idea of retail for rent on the palm is great. It will add to the palm's vitality and create a recurring revenue stream for Nakheel and give some relief to out of work contractors and construction employees.
HAHA - who in their right mind would ever do business with Nakheel - from not paying suppliers (giving them part payment with bonds instead) to treating their owners on the shoreline the way that they have by renaging on contracts they signed with them to ignoring the rulings of RERA - eveybody would be well advised to stay away from them!
Please can Nakheel honour its commitments to existing owners on the Palm first! How about completing the long strip of sand on the Trunk of the Palm?
When we bought we were promised a marina which was unilaterally changed to a monorail. We were then promised "a world class park" and left to see this area become an eye-sore and a storage dump. The so called "world class" mile of "high end" shops and restaurants has yet to materialise and now Nakheel is promising the same elsewhere on the Palm!
Please honour your promises first before making new ones.