Nakheel plans Dh4.8b sukuk

Nakheel is all set for the second tranche of Dh4.8 billion Islamic bond, or sukuk, to be issued to its trade creditors by the end of April, chairman Ali Rashid Lootah said on Wednesday. The developer of palm-shaped island issued the first tranche of the five-year sukuk worth Dh3.8 billion to its trade creditors in the last week of August and the asset-backed Islamic bond carries a profit rate of 10 per cent. “The second tranche... will be launched at the end of this month, it will be on the same terms and listing will be done as soon as possible,” Lootah told reporters at the ground-breaking of the company’s new Palma Residences project in Dubai. The Islamic bond would be listed on Nasdaq Dubai, he said. The sukuk is part of the Dubai-based company’s $16 billion debt restructuring deal, which repays trade creditors 40 per cent in cash and 60 per cent via the Islamic bond. In accordance with the restructuring plan, Nakheel is to develop 8,252 units across various developments in Dubai. To date, the handover of 3,549 units has been successfully completed with remaining units planned for hand over in 2012 and early 2013. Earlier at the event, Nakheel broke ground on its Palma Residences project at Palm Jumeriah and said the construction will be completed in 18 months. It’s company’s first project, which is being launched after the colmpletion of its Dh60 billion restructuring process. “Palma Residences went on sale just one week ago. Thirty units have already been sold for a combined value of nearly Dh223 million, with an additional 30 enquiries and site tours from serious potential buyers,” Lootah said. That’s a clear sign of renewed investor confidence in Dubai real estate and in particular for unique products such as those offered on Palm Jumeirah, Lootah said, adding: “We have seen a very healthy demand in the first quarter of 2012, and this looks set to continue for the year.” Work on the Mediterranean-style project has began following the appointment of Dubai Civil Engineering as main contractor on the project. The contract — for infrastructure and construction — is worth Dh194 million. Palma Residences, located on a 61,000sqm area of reclaimed land off the eastern side of Palm Jumeirah’s trunk, is an exclusive collection of 104 Mediterranean-style residential units, each with direct beach or pool access. The homes will form a distinct, gated community that will complement Palm Jumeirah’s existing residences. Prices for Palma Residences range from Dh6 million to around Dh8 million.