Nakheel Properties Explained

Nakheel Properties
Type:Government owned
Industry:Real estate
Services:Property development
Revenue: AED 5.67 billion[1]
Revenue Year:2017
Owner:Government of Dubai
Num Employees:1,500[2]
Subsid:Jumeirah Village, Nakheel Marinas, International City, Canal District, Jumeirah Islands, Warsan, Dragon Mart Complex, The Gardens, Nakheel Asset Management, Palm Deira, Azure Residences, Veneto Residence, Badrah, Golden Mile
Location City:Dubai
Location Country:United Arab Emirates
Homepage:www.nakheel.com

Nakheel Properties (Arabic: نَـخٍـيْـل|nakhīl|[[palm tree]]) is a real estate development company based in Dubai, United Arab Emirates.[3] The formal name of the company is Nakheel PJSC (private joint stock company) and it was a subsidiary of Dubai World and a private state-owned enterprise.[4]

Nakheel was central to Dubai's debt crisis in 2009–2010.[5] The company has been reported to be the second-largest property developer in Dubai after Emaar Properties.[6]

History

Nakheel was founded in 2003 as a subsidiary of state-owned Dubai World and a private state-owned enterprise.[7]

The company was involved with a sukuk, which raised legal issues in 2009.[8] [9] This sukuk has been the subject of academic study.[10] [11] It was reported to be the largest ever sukuk.[12] [13]

In 2010, Sultan Ahmed bin Sulayem was replaced as chairman of Dubai World.[14] [15] The same year, the company started payments for creditors.[16] In 2011, the company undertook 59 billion dirham ($16 billion) of debt restructuring.[17] On 6 July 2011, Dubai World’s board of directors announced that Nakheel's legal ownership would be transferred to the Government of Dubai upon completion of the company's financial restructuring.[18] [19] In 2012, the company was the subject of a study by the American University of Sharjah on corporate governance along with Tamweel.[20]

In 2013, the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, approved US$898 million of funding for the company and ordered work to start on two major projects on the Palm Jumeirah.[21] [22] In 2017, the company achieved $1 billion net profit in nine months, delivering 1,200 units with 23,000 under construction in Dubai.[23] The same year (2017), Nakheel awarded a $410 million contract for the Palm Gateway to the company Shapoorji Pallonji Mideast to construct a three-tower residential, retail, and beach club complex.[24] [25]

In January 2020, Mohammed Ibrahim Al Shaibani took over as chairman from Ali Rashid Lootah.[26] [27] In May 2020, it was reported that some employees' salaries were cut between 30 and 50 percent for senior staff due to the COVID-19 pandemic.[28] In November 2020, Naaman Atallah was appointed as the company's chief executive officer.[29]

In September 2022, Nakheel rebranded, unveiled a new logo.[30] The same month, the company also made announcements regarding previously frozen projects, including Palm Deira, which the company restarted in August 2022, and which was renamed as Deira Islands, then changed to Dubai Islands.

After a $4.6 billion debt restructuring deal, Nakheel is set to relaunch the Palm Jebel Ali project, having stalled since 2008,[31] [32] building 1,700 villas and 6,000 apartments on the man-made islands,[33] having previously contacted existing investors offering to buy back their contracts for plots and properties.[34] [35] [36]

Financial crisis of 2007–2008

Nakheel prospered until the financial crisis of 2007–2010 started a decline in Dubai's real estate market, putting Dubai World at risk of bankruptcy in November 2009. After write-downs of real estate values and lower sales, Nakheel had made a loss of 13.4bn dirham ($3.65 billion) in the first half of 2009,[37] and despite a cash bail-out in May,[38] the company sought to delay the December repayment of a $3.5 billion bond. This happened because Dubai's government refused to bail out Nakheel's parent company,[39] due to which it requested a stay on debt payments, and consequently, it was downgraded to junk status.[40] However, on 14 December 2009, in the nick of time, neighbouring Abu Dhabi invested $10bn in Dubai, warding off Nakheel's debt default,[41] and in March 2010, the government of Dubai rescued Dubai World, providing $9.5bn to help ensure Nakheel bond-holders would be paid on time and in full.[42] The move was seen as key to resolving Dubai's debt crisis: "Fix Nakheel, and you go a long way to fixing Dubai real estate; fix real estate, and you fix Dubai," said Aidan Burkitt, hired from Deloitte to be Dubai World's chief restructuring officer.

Portfolio

Nakheel Properties has a portfolio of projects in Dubai across the residential, retail, hospitality and leisure sectors. Property development projects include:

Naya 3[43]

Retail project developments include Ibn Battuta Mall, Dragon Mart 1 and 2, Golden Mile Galleria, Nakheel Mall,[46] The Pointe, Deira Mall, Deira Islands Night Souk, Warsan Souk, Al Khail Avenue, The Circle Mall and Nad Al Sheba Mall, as well as extensions to Dragon Mart and Ibn Battuta Mall.

Nakheel has also developed properties outside Dubai, in Montenegro for example.[47]

See also

Notes and References

  1. Web site: Dubai Media Office Press Release . 31 January 2018 . UAE . . Media Office . 12 February 2018 . 6 February 2020 . https://web.archive.org/web/20200206191426/https://www.mediaoffice.ae/en/media-center/news/31/1/2018/nakheel.aspx . dead .
  2. Web site: Nakheel PJSC . . 26 May 2021 .
  3. News: Booming Dubai. De olie voorbij . Jacobs . W.A.A. . Geografie. Vaktijdschrift voor Geografen . 2005 . 8 . 22–25 . 2066/47223 . 0926-3837 .
  4. Web site: Nakheel PJSC . ClarifiedBy.com . Diligencia Group . 4 October 2021 .
  5. News: Hughes . Jack . 23 November 2010 . Dubai's towering ambitions turned out to be a mirage . Guardian . 6 December 2021.
  6. Web site: Top 10 Dubai Property Developers: A Complete Guide. Reid . Kirchenbauer . 7 March 2019 . 14 August 2021 . Invest Asian .
  7. News: Debt crisis puts spotlight on Dubai World . 6 December 2021 . CBC News . 27 November 2009.
  8. News: Nakheel and the sukuk legal spook . Tracy . Alloway . . 4 December 2009 .
  9. News: 2009-12-09 . Nakheel 09 debt hits record low, investors eye default . en . Reuters . 2023-01-04.
  10. Dubai Debt Crisis: A Legal Analysis of the Nakheel Sukuk . Salah . Omar . . 4 . 1 . 2010 . 19–32 .
  11. Sukuk Nakheel: Case Study Of Islamic Finance Crisis . Benabderrahmane . Meryem . 117 . 126–129 . مجلة المنارة للدراسات القانونية والإدارية . Al-Manara Journal of Legal and Administrative Studies . Dar AlMandumah . 2019 . ar .
  12. Largest sukuk ever . Abraham . Robin . Long . Shani . . January 2007 . 26 . 1 . 02626969 .
  13. News: 2010-03-09 . Nakheel Bonds Rise as JPMorgan Sees Repayment at Par . en . Bloomberg.com . 2023-01-04.
  14. News: Dubai Replaces Nakheel Chairman . Stefania . Bianchi . Mirna . Sleiman . . 31 March 2010 .
  15. Web site: Bin Sulayem exit ends tumultuous era . 2023-01-04 . www.ft.com.
  16. News: Nakheel Starts Payments to Creditors . Stefania . Bianchi . . 30 June 2010 .
  17. News: Nakheel completes debt restructuring . Camilla . Hall . . 24 August 2011 .
  18. Web site: Dubai Government to take over Nakheel and Limitless . DubaiChronicle . 6 July 2011 . 14 August 2021 .
  19. News: Dubai World shifts Nakheel, Limitless ownership to gov't . Arabian Business . 2023-01-04.
  20. Alkafaji . Yass . Majdalawieh . Munir . Corporate Governance and Internal Audit in the United Arab Emirates (UAE) . AUS . en-US . 0897-0378.
  21. Dubai ruler approves $898m Nakheel projects . Andy . Sambidge . . 2 February 2013 .
  22. Web site: Nakheel – Emirian real-estate company . . 4 October 2021 .
  23. News: Dubai's Nakheel records $1bn net profit in 9M 2017 . Neha . Bhatia . 26 October 2017 . Construction Week . 14 August 2021 .
  24. News: Nakheel awards $410m contract for The Palm Gateway . Fatima . De La Cerna . 14 May 2017 . 14 August 2021 . Construction Week .
  25. News: Dubai's Nakheel awards $410m deal to build Palm Gateway project . Arabian Business . 2023-01-04.
  26. News: Mohammed Ibrahim Al Shaibani takes over as Nakheel Chairman . 21 January 2020 . . en.
  27. News: Mohammed Ibrahim Al Shaibani takes over as Nakheel Chairman . 21 January 2020 . . Singapore . en.
  28. News: 6 May 2020 . Covid-19: Nakheel cuts some salaries by as much as 50% . en . . 14 August 2021.
  29. News: Dubai developer Nakheel appoints new CEO . Shane . McGinley . 23 November 2020 . 14 August 2021 . . en.
  30. News: Nakheel unveils massive rebranding, major Palm Jebal Ali updates expected . 10 October 2022 . Arabian Business . 25 September 2022.
  31. News: Nakheel to relaunch and rebrand Palm Jebel Ali . 10 October 2022 . Arabian Business . 28 September 2022.
  32. Web site: Oxborrow . Ian . 2022-10-20 . Dubai property deal worth $163m closed as Palm Jumeirah prices continue to spiral upwards . 2023-01-04 . The National . en.
  33. News: Kerr . Simeon . 27 September 2022 . Dubai developer Nakheel nears $4.6bn debt restructuring to fund expansion . Financial Times . 10 October 2022.
  34. News: Kerr . Simeon . Dubai looks to restart mothballed luxury developments for wave of wealthy incomers . 10 October 2022 . Financial Times . 21 August 2022.
  35. News: Sayegh . Hadeel Al . 2022-11-08 . Dubai Palm Island developer gets $4.6 bln funding for new waterfront projects . en . Reuters . 2023-01-04.
  36. News: Cahill . Helen . 2022-08-26 . Dubai's abandoned palm islands rise again as Gulf rides oil and gas wave . en-GB . The Telegraph . 2023-01-04 . 0307-1235.
  37. News: Moya . Elena . 8 December 2009 . Six Dubai companies downgraded to junk status . Guardian . 6 December 2021.
  38. News: Kerr . Simeon . 11 May 2009 . Dubai's Nakheel receives bail-out cash . .
  39. News: Hargreaves . Deborah . 13 December 2009 . Fears rise over bond debt of Dubai World's property arm . Guardian . 6 December 2021.
  40. News: Thomas Jr. . Landon . 25 November 2009 . Dubai Fund Asks for Stay on Debt Payments . .
  41. News: Teather . David . 14 December 2009 . Relief for world markets as Abu Dhabi throws $10bn lifeline to Dubai . Guardian . 6 December 2021.
  42. News: Moya . Elena . 25 March 2010 . Dubai World saved by $9.5bn rescue package . Guardian . 6 December 2021.
  43. Web site: Investment . My Off Plan . 27 March 2024 . Naya 3 at District One by Nakheel Properties . live . 27 March 2024 . My Off Plan Investment.
  44. Web site: AED169 million third expansion takes shape at Nakheel's Dragon City . 12 June 2018 . UAE . . Media Office . 15 August 2021 .
  45. Web site: Dubai's Nakheel awards $223m Palm Tower contract to two Abu Dhabi builders . Davina . Munro . 4 October 2015 . ME Construction News . 14 August 2021 .
  46. Web site: AED1.2 billion Nakheel Mall 85 per cent complete . 5 March 2018 . UAE . . Media Office . 15 August 2021 .
  47. News: Dubai's Nakheel offers Montenegro citizenship on waterfront residences at Porto Montenegro . Zainab . Mansoor . 21 September 2021 . .

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