Nakheel Keeps Going in Tough Times

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(DUBAI, UAE) -- The economic climate is tougher than it used to be for Nakheel, one of Dubai's two giant developers, but this week the company reached a milestone at Waterfront and extended a helping hand to The World or at least some of the people who have invested in it.

At Waterfront, foundations for two power substations were cast, after six months of design and engineering. It took 1700 tons of concrete and 170 tons of reinforced steel to complete the foundations.

Matt Joyce, Managing Director of Waterfront, said, "as the world's largest coastal development, Waterfront will transform 1.4 billion square feet of empty desert and sea into an international community for an estimated population of 1.5 million people."  Joyce added the two substations are the first of "a huge network of substations" for Waterfront.

At The World, Nakheel created 254 artificial islands and so far has sold 175. But some of the buyers cannot keep up with payments and have no money for construction on their property. So Nakheel is working with banks to create more funding, according to Hamza Mustafa, Managing Director of The World.

To buy an island used to require 15 percent down and 15 percent more every six months. The buyer would get permission to build after 45 percent of the selling price was paid. The rest was due within 18 months.

"In the past," Mustafa said, "they would have had to pay a 1 percent penalty in interest a month, but now we're being more accommodating." He explained that some developers who bought more than one island have "asked for consolidation, which means those who bought, let's say, two islands now want to give one up."

In 2009 six developers may begin construction on a total of 25 islands and Nakheel itself is due to develop 30 islands although it's not yet clear how quickly that will happen.
 

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