Dubai state developer Nakheel has secured 17 billion dirhams ($4.63 billion) in financing as the group behind the palm-shaped islands accelerates plans for new waterfront projects including Dubai Islands amid a red hot property market.
Nakheel said in a statement on Tuesday the transaction comprised of 11 billion dirhams in refinancing and additional funds of 6 billion dirhams through a syndicate from Emirates NBD , Mashreqbank and Dubai Islamic Bank .
Nakheel, which was forced into a massive debt restructuring following Dubai's 2009-2010 real estate crash, is cashing in on a rise in demand for coastal properties in the wake of the coronavirus pandemic.
A Nakheel spokesperson said the transactions will further strengthen its financial position, and reflects the confidence of the banking institutions in the strategic new focus of the company.
Nakheel is planning to develop another man-made island named Dubai Islands, formerly known as Deira Islands, comprising five islands over a total area of 17 sq km.
It is also revisiting the plan for the Palm Jebel Ali, the company said in September, a project that has been left dormant since 2009.
"Nakheel matured a lot over the years. It's nothing like the adventurous company it once was in 2008," said Nasser al-Shaikh, Dubai's former finance chief who helped navigate the emirate through the 2009 debt crisis.
"This is evident in the utilisation of the new facility where most is going to restructure & optimise current debt, leaving enough to launch new highly anticipated developments such as Dubai Islands & Palm Jebel Ali," al-Shaikh said.
The real estate market in Dubai, the Middle East's financial and tourism hub, began its recovery early last year in the wake of the coronavirus pandemic as the government kept its economy and airports mostly open.
First-half residential real estate transaction volumes rose 60%, with an 85% rise in the value of properties sold, property consultancy Betterhomes said in a July report.
The transaction "is a very good sign that the demand is still strong and banks willing to do such a large deal with Nakheel shows that they also see signs of positive cash flow in the future," said Mohammed Ali Yasin, an investment and capital markets advisor in Abu Dhabi.
A villa on Nakheel's Palm Jumeirah island in July fetched 302.5 million dirhams ($82.36 million), its developer Alpago Properties said in October without naming the buyer due to privacy reasons, setting a new record for the most expensive residential property ever sold in the emirate.
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