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Nakheel goes big on hospitality at Deira Islands

Dubai: Hospitality projects are being assigned top priority as Nakheel opens plot sales for private developers on the first two offshore land clusters forming its ‘Deira Islands’ master-development. Sales open on Sunday (March 30) for as many as 79 plots and 15 resorts, Nakheel said on Wednesday.

Together, these will constitute more the 23,421 hotel keys — plus 31,636 apartments — and which would come in handy for the expected visitor surge by the time Dubai hosts World Expo 2020. In terms of land, Sunday’s launch will release more than 12.4 million square feet.

Nakheel is being generous on the payment terms for the plots, allowing up to five years. Construction works should start in six months, according to chairman, Ali Rashid Lootah.

Further plots will be available — in all these could total more than 500 — will be released on the two islands as and when required. (Deira Islands will add 40 kilometres including 21 kilometres of beachfront.)

Nakheel itself will be developing two hotels apiece on each island as well as a resort, with completion expected in three years. Its preference is for three- and four-star properties, of which there is a gap in the market and especially of those hosting a waterfront.

In addition, it will also build a marina, the Night Market and a 1 million square feet mall as part of the initial phase. (On the access side, there will be two roadways connecting the island from the Dubai side.)

“The project is also meant to revive Deira, which really deserves some attention and we intend to do that by making the Islands a prime destination,” Lootah said. “As for the cost of development, after we made the recent pre-payment on the loan, there is huge interest from financial institutions to fund new Nakheel developments.” (The developer paid out Dh2.35 billion last month and another tranche of Dh1.65 billion in the third quarter.)

“We are weighing all the options — at the same time we do have the funds available to launch the project.”

The plot sales to private developers — these range from 80,000 square feet to 670,000 square feet — will get the funds flowing into the Nakheel kitty.

The developer will also be using the Deira Islands to add to its hotel properties. The aim is to have 10 [hotels] in its portfolio by end of the decade.

Another strategy the developer is adopting is to expand the leasing portfolio, with major focus being on the retail stock. Up to 6 million square feet of additional retail space will be created by 2016, including the mall on Deira Islands as well the new one on the Palm.

“Leasing income should generate Dh1.2 billion this year and our target would be to triple it by 2016,” Lootah said. “We would be doing well given it was just Dh600 million or thereabouts in 2010.

“But it will not just be retail area that will form the leasing assets; we are now looking at how we could get more from residential leasing opportunities.”