Nakheel posts record breaking $1.35bn profit

Nakheel has recorded the highest yearly net profit in the company’s history thanks to the expansion of its retail, hospitality and residential leasing businesses.

The Dubai developer booked earnings of AED 4.96bn ($1.35bn) in 2016 – a 13 percent increase on the 2015 net profit of AED 4.38bn.

Nakheel had a particularly strong final quarter, generating a net profit of AED 955mn for the three months to December 31 – up 22 percent on the same period in 2015.

The 2016 results take Nakheel’s cumulative net earnings since 2010 to AED 19.9bn.

Property development, the company’s core business, continued apace to ensure that new projects are completed, adding further strength to the balance sheet.

During 2016, Nakheel handed over 1,426 land form and built form units, primarily in Palm Jumeirah, Jumeirah Park, Al Furjan and International City.

Retail revenue grew by more than 70 percent in 2016 compared to 2015, proving that the strategy to create more company-owned, cash-generating assets is paying off.

In 2016, Nakheel Malls further expanded its operating retail portfolio by opening its phase one extension at Ibn Battuta Mall, neighbourhood Pavilions at International City and Al Furjan and the Club Vista Mare restaurant plaza on Palm Jumeirah.

Revenue from Nakheel’s hospitality business jumped by 50 percent in 2016 compared to 2015.

During the year, Nakheel Hospitality commenced operations at hotels Dragon Mart (ibis Styles, operated by Accor) and Ibn Battuta Mall (operated as a Premier Inn), which have 623 rooms between them.

Residential leasing also performed well in 2016, with occupancy rates remaining at almost 100 percent.

With more residential leasing expected to become operational in 2017, this sector will continue to provide a steady source of revenue for Nakheel.

Nakheel Chairman Ali Rashid Lootah said: “Under our ongoing commitment to maintaining the momentum in the local economy, Nakheel awarded construction contracts worth around AED 3bn in 2016, and is set to award AED 10bn worth this year.

“The future is promising and we are confident that our strategy of having a diversified business will significantly benefit Nakheel and reinforce its position as one of the world’s leading real estate developers.

“We are currently working towards completing our healthy pipeline of projects and making them operational in the next few years, starting with The Pointe at Palm Jumeirah, one of our key hospitality and retail destinations, which is due to open this year.

“A month into 2017, we have already begun handovers to customers on some of our completed projects, signed agreements with new hospitality partners, released the first of many construction tenders and announced an investment of AED 150mn in cycle tracks across our communities, while later this year we will launch sales of our new project on Palm Jumeirah, PALM 360.”