Dubai Palm Island developer secures $4.6 billion in funding for new waterfront projects

DUBAI, Nov 8 (Reuters) – Dubai state property developer Nakheel has secured 17 billion dirhams ($4.63 billion) in funding as the group behind the island-shaped palm is accelerating its plans for new waterfront projects, including the islands of Dubai, in a hot property market.

Nakheel said in a statement on Tuesday that the transaction included 11 billion dirhams of refinancing and additional funds of 6 billion dirhams through a syndicate of Emirates NBD (ENBD.DU), Mashreqbank (MASB.DU) and Dubai Islamic Bank ( DISB.DU) .

Nakheel, who was forced into massive debt restructuring following the Dubai property crash of 2009-2010, is benefiting from a surge in demand for coastal properties following the coronavirus pandemic.

A Nakheel spokesperson said the transactions will further strengthen its financial position and reflect banking institutions’ confidence in the company’s new strategic direction.

Nakheel plans to develop another man-made island named Dubai Islands, formerly known as Deira Islands, comprising five islands with a total area of ​​17 km2.

It is also revising the plan for the Palm Jebel Ali, the company announced in September, a dormant project since 2009.

“Nakheel has matured a lot over the years. It’s nothing like the adventurous business it once was in 2008,” said Nasser al-Shaikh, the former Dubai finance chief who helped set up navigate the emirate during the 2009 debt crisis.

“This is evident in the use of the new facility where most will restructure and optimize current debt, leaving enough to launch highly anticipated new developments such as Dubai Islands and Palm Jebel Ali,” al-Shaikh said. .

The property market in Dubai, the Middle East’s financial and tourism hub, began its recovery early last year from the coronavirus pandemic as the government kept its economy and airports mostly on hold open.

Residential real estate transaction volumes in the first half rose 60%, with an 85% increase in the value of properties sold, real estate consultancy Betterhomes said in a July report.

The transaction “is a very good sign that demand is still strong and banks willing to enter into such a large transaction with Nakheel show that they also see signs of positive cash flow in the future,” said Mohammed Ali Yasin. , investment and capital markets. adviser in Abu Dhabi.

A villa on the Palm Jumeirah island of Nakheel in July fetched 302.5 million dirhams ($82.36 million), its developer Alpago Properties said in October without naming the buyer for confidentiality reasons, setting a new record for the most expensive residential property ever sold in the emirate.

($1 = 3.6729 UAE Dirham)

Reporting by Hadeel Al Sayegh Editing by Janane Venkatraman, David Goodman and David Evans

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