Dubai property developer Nakheel is set to add a further 1 billion UAE dirhams ($272.3 million) to its recurring revenue by the end of this year, according to the company's chairman, Ali Rashid Lootah.
Lootah said the company currently generates about 25 percent of its total sales from recurring revenue, but added that this would be boosted by the addition of rents from the 1.2 billion UAE dirham Nakheel Mall project and the 800 million dirham The Pointe dining and entertainment complex on Palm Jumeirah, as well as through rentals of newly-completed villas at its Nad Al Sheba development, where 1,572 homes are being built.
In January, Nakheel declared a 14 percent increase in profit of 5.67 billion dirhams for 2017, but the company did not disclose a revenue figure. However, Lootah told Reuters last year that the company will aim to generate over half of its revenue through recurring income by 2021
Speaking to journalists at a dinner held at The Pointe, Lootah said that the nearby Nakheel Mall - a four-storey mall with 1.2 million square feet of leasable space with a rooftop dining plaza and a hotel tower - will open in "the last quarter of the year, hopefully".
The 800 million The Pointe scheme - built at the tip of Palm Jumeirah's main trunk – is also set to complete in the fourth quarter. It will contain a total of 100 outlets, about 80 of which will be food and beverage units built along a promenade looking out onto the Atlantis hotel.
The development will also contain a cinema, a Union Co-Op supermarket, gyms and parking for 2,000 cars. Eventually, a station for the Palm Monorail will anchor the site, which Lootah said is already 75 percent pre-let.
Lootah also said that the company was likely to choose a contractor for soil compaction works at the Palm360 tower project "this week or early next week". A tender for a piling contractor for the 260 metre-high tower, which will contain a 125-room Raffles The Palm Dubai hotel and 331 Raffles-branded residences, is also out, and a tender for the main contractor is likely to be issued by "mid-September”, Lootah said. The project is due to complete in 2021.
Elsewhere, he said the developer's focus was mainly on the Deira Islands project, where joint ventures have already been agreed for three resort hotels.
"We already have one hotel under construction, another one in tender, another in development and the mall started," he said, adding that two more hotel resorts are planned. The three resort hotels currently under development are all joint ventures. Work has already begun on an 800-room resort hotel being built with Spain's RIU Hotels and Thailand's Centara Hotels is planning a 600-room property.
Last month, Nakheel announced that it had agreed a third joint venture with Deira Islands for a $160 million, 600-room Vienna House resort hotel. Vienna House is a hotel management company founded in Austria, which was last year sold to Thailand's U City Hotels group.
Lootah said that he was confident of the success of the Deira Island hotel projects, because they are catering to a niche of offering more affordable, beachside hotel properties.
"Currently, in Dubai there is no three- and four-star facilities on the beach. All of the facilities here is five star and luxury," he said. "This market is needed in Dubai."
He also said that he anticipates work starting on the Deira Islands Boulevard project - a series of 16 residential and serviced apartment towers being built around the 6.5 million sq ft Deira Mall - next year.
"There's no sense we have them completed before the mall. So we have to get the mall started. After one year we will tender them," Lootah said.
He expects the Deira Islands Boulevard scheme to take approximately two and-a-half years to complete.
(Reporting by Michael Fahy; Editing by Shane McGinley)
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