Nakheel planning to tap debt market again

(SATISH KUMAR)

 

Developer Nakheel, which last week sold almost $1 billion (Dh3.67bn) of Islamic bonds, said it plans to tap the debt market again this year and is considering making acquisitions abroad.

"The debt markets are starting to have a lot of life after sub-prime," Nakheel Chief Executive Officer Chris O'Donnell said.

The company will consider a share sale as part of the sukuk it sold 18 months ago, according to O'Donnell.

"It is one of our options and still an option that we will look seriously at. And we will probably be doing it in the next 12 to 18 months," he said.

Nakheel has placed more than $5.2bn of bonds during the past 18 months.

Having secured a sizeable portfolio of assets in the UK, the US, Africa, Australia and Singapore, Nakheel is looking at more mixed-use developments. However, it will slow down its pace of investment due to a deteriorating credit market, O'Donnell said. "Though we plan to grow our international portfolio over the next few years, we would not be acquiring anything new in the next three to six months.

"We are just sitting back basically taking a look at the world market after the effect of the sub-prime crisis," he said. "While we are looking at a lot of opportunities internationally, something that looks like a great opportunity today may not be as attractive in a few months' time. So we are just being a little bit cautious but it will only be for a short period of time. And then we are definitely back on the growth of our international pursuits," he added.

Having made the Palm developments popular across the world, Nakheel is weighing the possibility of replicating the concept in other countries, O'Donnell said.

"Palm is a major reclamation. And doing reclamation using such sophisticated technology has not been done on this scale elsewhere. We do not know yet whether it will be a Palm replication or some other major reclamation we would look at."

O'Donnell said the recent scandal involving developer Deyaar, in which CEO Zack Shahin is still in police custody, has positively impacted the Dubai property market.

"On one hand, I am disappointed that we have this sort of behaviour in the Dubai real estate market.

"On the other, it is fantastic that the government is taking action to actually clean up the real estate market," he said.

"What it has done is created a better awareness for the consumers that they really need to think twice about who they deal with.

"So if you are dealing with reputable developers such as Dubai Holding, Emaar, Nakheel, then that holds them in very good stead.

"It helps to raise consumer awareness. So, it has given a great deal of confidence to the local and international investors also."

 

The Numbers

$1bn: Nakheel sold Islamic bonds of this value last week

$5.2bn: Value of bonds placed in the past 18 months

 

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