Handovers help Nakheel to profit

Handing over properties helped the Dubai developer Nakheel to post a profit in the first quarter, reversing losses suffered in the same period last year.

Nakheel posted a net profit of Dh362 million (US$98.5m) in the first quarter of the year compared with a Dh36m loss a year earlier, it said yesterday.

"The positive results of the first quarter … continue to indicate a relatively more stable real estate market in Dubai," Nakheel said.

The developer's revenues of Dh1.35 billion for the quarter, were up by 159 per cent on the same quarter last year, it reported.

Nakheel in April announced a profit of Dh1.3bn for last year, up 33 per cent on the previous year.

Property prices in Dubai fell up to about 60 per cent from their peaks, resulting in Nakheel having to restructure $16bn of debt.

"We are continuing to see increased activity in the Dubai real estate markets, but within each sector there is considerable diversity in performance," said Alan Robertson, the chief executive of Jones Lang LaSalle Mena (Middle East and North Africa). "We are still seeing modest rental and price growth in the very best residential locations, but the high levels of supply in less prime locations means that overall average rents and prices remain under pressure."

In April, Nakheel started work on a townhouse development on the Palm Jumeirah. This was its first major project to launch following its debt restructuring.

Then the developer announced plans last month to build 192 studio apartments on the Palm.

It has also announced retail expansion plans, as it aims to double the size of DragonMart. The company is also looking at doubling the size of Ibn Battuta mall.

Nakheel said that "effective cost control measures … resulted in further reducing the overheads by Dh22m [in the first quarter] compared to the corresponding period in 2011". Meanwhile, its net assets increased by about Dh1bn to Dh24.5bn, Nakheel said.