Debt-ridden developer Nakheel posts Q1 profit

Dubai developer Nakheel Properties on Thursday said it swung to a profit in the first quarter as the developer handed over more properties and it cut costs. Nakheel, which was at the centre of a debt crisis in Dubai in 2009 when real estate prices crashed, said it made a profit of AED362m (US$98.56m) in the three months to March 31, up from a loss of AED36m in the year-earlier period. First-quarter revenue at the firm behind Dubai' Palm Jumeirah rose 159 percent to AED1.35bn. "Revenues were mainly driven by the handover of development properties in a number of Nakheel projects," the company said in an emailed statement. "Other business segments including retail and leasing also contributed positively to the results." The developer, which wrote off up to US$21.4bn of its real estate assets due to the property crash, said it had cut costs by AED22m in the first quarter, but did not provide comparative figures. Nakheel said its results indicated "a relatively more stable real estate market in Dubai". After a spectacular two-thirds collapse since 2008, Dubai house prices may finally stop falling this year, according to a Reuters poll earlier this month. Nakheel, Dubai’s biggest developer by assets, was hit hard by the global economic downturn, which saw property prices in the emirate decline by more than 65 percent from their 2008-peak. The slump forced Nakheel to write down the value of its real estate by US$21bn and prompted the bailout. The company also courted controversy last year over a plot to charge tenants at its Palm Shoreline development up to AED5,000 to access the building's beach clubs as the troubled developer moved to privatise facilities. The decision caused outcry among residents. Nakheel said in April 2011 profit reached AED1.3bn (US$353.93m), up from AED1bn in 2010. The firm also said it would likely issue a third tranche of its sukuk – Islamic bond – in two months time. By / Arabian Business