Nakheel Properties

Nakheel Properties 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 16 March 2024, Nakheel, along with Meydan, was 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 relaunched 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]

2008 financial crisis

Nakheel prospered until the 2008 financial crisis led to 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

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

See also

• List of largest corporate profits and losses
• Emaar_Properties
• DAMAC_Properties
• Meraas
• Property Finder