Nakheel Properties

Nakheel Properties
Company typeGovernment owned
IndustryReal estate
Founded2003; 22 years ago (2003)
Headquarters
Dubai
,
United Arab Emirates
Key people
ServicesProperty development
RevenueIncrease AED 5.67 billion[1] (2017)
OwnerGovernment of Dubai
Number of employees
1,500[2]
SubsidiariesJumeirah 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
Websitewww.nakheel.com

Nakheel Properties (Arabic: نَـخٍـيْـل, romanized: nakhīl, lit. '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][2]

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]

On March 16 2024 Nakheel, along with Meydan, were merged into Dubai Holding and ceased to be a separate entity.[7]

History

Nakheel was founded in 2003[4] as a subsidiary of state-owned Dubai World and a private state-owned enterprise.[8]

The company was involved with a sukuk, which raised legal issues in 2009.[9][10] This sukuk has been the subject of academic study.[11][12] It was reported to be the largest ever sukuk.[13][14]

In 2010, Sultan Ahmed bin Sulayem was replaced as chairman of Dubai World.[15][16] The same year, the company started payments for creditors.[17] In 2011, the company undertook 59 billion dirham ($16 billion) of debt restructuring.[18] 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.[19][20] In 2012, the company was the subject of a study by the American University of Sharjah on corporate governance along with Tamweel.[21]

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.[22][23] In 2017, the company achieved $1 billion net profit in nine months, delivering 1,200 units with 23,000 under construction in Dubai.[24] 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.[25][26]

In January 2020, Mohammed Ibrahim Al Shaibani took over as chairman from Ali Rashid Lootah.[27][28] 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.[29] In November 2020, Naaman Atallah was appointed as the company's chief executive officer.[30]

In September 2022, Nakheel rebranded, unveiled a new logo.[31] The same month, the company also made announcements regarding previously frozen projects, including Palm Deira, which the company restarted in August 2022,[31] 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,[32][33] building 1,700 villas and 6,000 apartments on the man-made islands,[34] having previously contacted existing investors offering to buy back their contracts for plots and properties.[35][36][37]

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.[8] 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,[38] and despite a cash bail-out in May,[39] 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,[38][40] due to which it requested a stay on debt payments, and consequently, it was downgraded to junk status.[41] However, on 14 December 2009, in the nick of time, neighbouring Abu Dhabi invested $10bn in Dubai, warding off Nakheel's debt default,[42] 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.[43] 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.[5]

Portfolio

A model of Palm Jumeirah at the Nakheel Sales Centre in 2008

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

Naya 3[44]

Retail project developments include Ibn Battuta Mall, Dragon Mart 1 and 2, Golden Mile Galleria, Nakheel Mall,[47] 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.[citation needed]

Nakheel has also developed properties outside Dubai, in Montenegro for example.[48]

See also

References

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