The Middle Eastern property developer Nakheel has received emerging funding from the Emirate in a bid to help pay invoices, the Financial Times has reported.
The developer, famous for creating Dubai’s palm tree island Palm Jumeirah, is the first state-backed company to publicly reveal it received part of Dubai’s $10 billion bailout programme. The capital was received by the government of Dubai from the United Arab Emirates central bank in February.
According to the FT, Nakheel, part of the state-owned conglomerate Dubai World, has asked some supplies to accept between 50 percent and 75 percent of payments due, and asked them to write off or reschedule the remaining balances.
Dubai World is also seeking to offload up to 15 percent of its port entity, DP World, in an effort to reduce the debt load of Nakheel.
The reports come as Dubai Land Department (DLD), a government agency overseeing lland and private property transactions in the Emirate, reportedly cancelled the projects of four property developers in the country. DLD and the Real Estate Regulatory Agency, which controls all real estate activities in Dubai, set up a committee to evaluate “unviable” projects at the start of the month.
However today, DLD director-general Sultan Butti bin Mijrin reportedly told Arabic news group Emarat Al Youm: “It has become difficult for those developers to meet the conditions in line with the regulations of Real Estate Regulatory Agency (Rera), after the grace period ended. Rera will cancel their projects.”
The report added the developers were required by law to return investors’ money. “They have lands, which can be sold to return the money. In addition, Rera can organise the process of re-funding in case the money is unavailable,” Sultan Butti bin Mijrin added.