MADRID: The property developer Nakheel is set to begin selling about 1,150 apartments in a major tower development to be built at its Dragonmart retail complex on the outskirts of Dubai.
The Palm Islands developer is tendering the project, which was originally intended for company’s rental portfolio, its chairman, Ali Rashid Lootah, told Arab News on the sidelines of the World Retail Congress in Madrid. Lootah said that the project would not be officially launched until the construction contract had been awarded, which is expected later this year.
“It is important to win the customer’s confidence,” he said. Nakheel is gearing up to complete 1,500 villas in the city’s Nad Al Sheba district, which will be rented.
The handover is expected to boost the developer’s recurring revenues this year as it switches its focus from massive masterplanned projects to increasing rental income through the construction of hotels and shopping malls.
“A lot of our product will be in the market in the third quarter of this year, so our recurring income next year will be much higher,” Lootah said. He also revealed that the developer was eyeing more projects in the UAE’s northern emirates.
The Dubai property market is coming under pressure after six years of rampant construction that has led to a glut of new homes, encouraging developers such as Nakheel to boost their recurring revenues and reduce their reliance on one-off sales.
About 3,000 units entered the market in the first three months of 2018, with almost 80 percent of them apartments, according to data from JLL, the property broker.
Sales prices in the emirate have declined by about 4.1 percent over the year, while rents have fallen by about 6.5 percent, it said.
Dubai’s retail sector has been even worse off, with thousands of square meters of new space hitting the market. JLL estimates that retail rents have fallen by as much as 25 percent in the past year with vacancy rates rising from 9 percent to 12 percent.