Dubai developer Nakheel posts 19% rise in 2015 net profit

Dubai developer Nakheel has reported a 19 per cent rise in 2015 net profit on the back of improved retail and leasing revenues.

The company reported a net profit of Dhs 4.38bn for the year, compared to Dhs 3.68bn in 2014.

Combined revenues from retail and residential leasing increased in 2015 compared to the previous year, the developer said, without providing further details.

Nakheel’s current and future retail project portfolio covers more than 15 million square feet of leasable space with developments including Ibn Battuta Mall, Dragon Mart 1 and 2, Nakheel Mall and The Pointe among others.

Meanwhile its residential leasing portfolio is set to increase to more than 20,000 units.

Chairman Ali Rashid Lootah said: “We are pleased to announce yet another year of strong financial performance. Nakheel’s profits have steadily improved from Dhs 960m in 2010.

“2015 saw the completion of Dragon Mart 2, the first phase of expansion at Dragon City which, in subsequent years will contribute significantly in diversifying our revenue streams.

“In 2015, Nakheel awarded new contracts to the tune of Dhs 8bn for various projects currently under development, including The Palm Tower, Deira Islands Night Souk, Warsan Souk and the Circle Mall. These are expected to contribute significantly to the local economy and further strengthen the local real estate market.”

Last year Nakheel handed over 847 units to customers across Palm Jumeirah, Al Furjan, International City, Jumeirah Village, Jumeirah Park and Jumeirah Heights.

In total, the developer said it has delivered around 9,700 units between 2010 and December 31, 2015.

Meanwhile, in line with its diversification strategy, the developer also opened its first hospitality asset – the ibis Styles hotel at Dragon Mart earlier this week. It has a further nine hotels planned in the pipeline.

“Our strategy to have a more diversified business is taking shape. Our first hotel has opened, Dragon Mart 2 is now operational, and we expect to complete and start operations at the first phase our Ibn Battuta Mall expansion in 2016,” said Lootah.

“These projects will contribute to our recurring revenue which is expected to grow in subsequent years as more projects are completed.”

The company has been consecutively posting growth after it underwent a massive restructuring plan in 2011. It paid off most of its debts in 2014.

“Our trade creditor sukuk is due to mature in August 2016 and Nakheel is well-placed to honour this financial commitment from its own internal resources, which will successfully conclude the last of any restructuring-related matter,” added Lootah.