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| 15 August, 2018

Dubai's Nakheel reports 4% fall in first-half profit

Developer says 38 percent of revenue now generated from recurring sources

The Pointe development containing 1.5km of boardwalk retail units is set to open later this year

The Pointe development containing 1.5km of boardwalk retail units is set to open later this year

Nakheel/Handout via Thomson Reuters Zawya

Nakheel, the master developer behind Dubai's Palm Jumeirah, on Wednesday announced a net profit of 2.51 billion United Arab Emirates dirhams ($683.5 million) for the first six months of 2018 - a 3.8 percent decline on the 2.61 billion profit achieved in the same period a year earlier.

The state-owned real estate firm did not provide a revenue figure, but said in its statement that annual recurring revenue from its non-development arm (which includes its retail, hospitality, asset management and leasing divisions) has now reached 2.6 billion dirhams, which it said represents 38 percent of its total revenue, which is three times the amount generated from these sources in 2010.

It added that it expects recurring revenue to grow further this year once it opens The Pointe - an 800 million dirham, food and beverage-led development containing 100 units - at Palm Jumeirah later this year, followed by the new Nakheel Mall and the Palm Tower next year.

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The company said that it had awarded 6 billion dirhams worth of construction contracts in the first half of this year, including the 4.2 billion dirham deal with United Engineering Contracting (Unec) to build the 4 million sq ft Deira Mall planned for its Deira Islands scheme, a 385 million dirham contract for a RIU hotel at Deira Islands and a 447 million dirham contract to link the islands to the mainland.

It also awarded a 600 million dirham contract to Metac General Contracting build a new 1.4 million sq ft mall at its Nad Al Sheba development.

(Writing by Michael Fahy; Editing by Shane McGinley)

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© ZAWYA 2018