UAE. Nakheel, Dubai’s biggest developer, plans to start its first new project on the Palm Jumeriah artificial island since the company received a government bailout in 2009.
Nakheel will build shops, computer-controlled fountains and a public walk on the tip of the palm-shaped island, Chairman Ali Rashed Lootah said at a press conference today. Nakheel is in talks with banks to raise at least AED300 million (US$82 million) for the project, which will be operated by the company when it’s completed.
“The retail sector is strategic for Nakheel,” Lootah said, adding the company is looking to increase its sources of recurring income.
Nakheel wrote down the value of its real estate by AED78.6 billion after the credit crisis caused the emirate’s speculation-driven property market to collapse. The company received an $8.6 billion bailout from Dubai’s government as part of a US$10.5 billion debt restructuring that included issuing an Islamic bond, or sukuk, to repay trade creditors.
Nakheel also plans to issue an Islamic bond, or sukuk, before June to settle outstanding claims by contractors, Lootah said. The value won’t exceed 1 billion dirhams, he said.
Developers in the United Arab Emirates, which includes Dubai and Abu Dhabi, canceled or postponed more than US$500 billion worth of projects since the property market crashed. Developments on hold include Nakheel’s Palm Jebel Ali and Palm Deira islands as well as most of its world map-shaped island chain.
The company expects the new project to be completed in about 18 months, Lootah said today. Nakheel hasn’t decided whether to raise funds through loans or bonds for the development, he said.