Plot and property sales ensured Nakheel delivered an upbeat set of numbers for the first quarter, with net profit up 28 per cent to Dh629 million (it was Dh491 million in Q1 last year) on revenues of Dh1.37 billion.
“Our Q1-2014 results build on our impressive financial performance in 2013 and are a clear indication of what lies ahead for the rest of the year,” said Ali Rashid Lootah, Nakheel’s chairman, in a statement. “We continue to deliver ahead of our business plan, enhance our existing communities and expand our business and development portfolio.”
During the first quarter, Nakheel handed over 400 units — in Palm Jumeirah, Al Furjan, International City, Jumeirah Village, Jumeirah Park and Jumeirah Heights.
“Of late, Nakheel has been quite active with plot sales, at Jumeirah Park and Al Furjan, where individual buyers can come in and design/build their own homes,” said Cecilia Reinaldo, who heads Fine & Country UAE. “We are seeing a gradual build-up of investor interest for this option — the benefit would be that a plot in Jumeirah Park could cost around Dh500 a square foot and it would take another Dh300 or thereabouts to build the property.
“Against that, a completed unit would be selling for Dh1,400 — this means there’s a sufficient gap for future appreciation in value from the first option. But such investors/end-users require sufficient funds at their disposal and will need to engage a contractor on their own. But choices are available for them.”
Late last month, Nakheel also launched plot sales at two of the Deira Islands, but strictly for developers of hotels and resorts. Details of what the base price is for the plots have not been revealed.
For the rest of the year, Nakheel’s plans include the handover of around 1,200 units as well as investment in new projects. The developer will complete Palma Residences on Palm Jumeirah — the first project to be announced post the restructuring — as well as its 1.9 million square feet expansion of Dragon Mart and community retail centres at Jumeirah Park and Discovery Gardens. Retail and hospitality are the two big initiatives it is working on in the midterm.
On the paying off of its debts, Nakheel continues to set the pace. In February, Dh2.35 billion was paid 18 months ahead of time to creditor banks. “We are well on course to further reduce our bank debt during 2014,” said Lootah.
For 2013, the master-developer had reported profits of Dh2.57 billion, up 27 per cent on 2012.