Dubai: The Dubai Government owned developer Nakheel is now “debt-free” after paying off a Dh4.4 billion Sukuk, which carried a 10 per cent rate. The fund has been put up with Deutsche Bank (in its function as the agent bank), which will be disbursing it to the Sukuk holders.

The Sukuk – which initially had a size of Dh8.4 billion - was due to mature on August 25. Nakheel said it met all of its Sukuk pay-offs from internal funds.

The timing has a nice symmetry to it, given that it was two years ago - by August 21 - that the developer paid off Dh7.9 billion owed to banks. This was a full four years before they were due. (Incidentally, it was in August 2011 that a new restructuring plan was formalized.) The latest pay-off also represents the closing off Nakheel’s far-reaching restructuring programme that was launched in 2010 in the aftermath of the Dubai property market crash in 2009.

It also means that the restructuring effected savings off Dh25 billion, brought about by managing costs across the board as well as the boost to income from the upturn Dubai’s realty market witnessed between 2011 to mid-2014. There were protracted negotiations with banks and trade creditors over the repayment schedules, but from the moment Dubai’s market corrected itself, Nakheel found itself on a strong footing in the negotiations.

As against the initial estimate of Dh42 billion on restructuring and financing costs, Nakheel was able to bring it down to Dh30.3 billion. Cost to complete projects was reduced to Dh7 billion from Dh10.8 billion. It all helped with the bottom-line.

Also, during this period, Nakheel widened its leased property portfolio, including retail, as well as get into hospitality. This is how it intends to script the next phase of its growth strategy.

The years since 2010 have been “challenging, but we were able to achieve the turnaround in a quiet manner,” said Ali Rashid Lootah, Chairman. “We didn’t walk away from any of the commitments we took on… we delivered.

“Nakheel will continue to have growth every year going forward… I can assure you of that. We carry assets that are stated at book value… their actual value could actually be double of that. In my personal view, even three times the book value.” (For the current financial year, Nakheel’s assets are valued at Dh36.5 billion, compared with Dh22.8 billion in 2010.) On the profit side, Nakheel is landing some heavy punches. Since 2010, the net has gone through a five-fold increase, from Dh900 million to Dh4.4 billion last year.

And the contracts it is putting out are substantial – a Dh1.5 billion one is to be announced before Cityscape in early September. As of this month, it has seeded the market to the tune of Dh4.4 billion in new tenders, while last year this had reached Dh8 billion.

There is a big one coming up down the line – a Dh4 billion or so one for a mega mall for the Deira Islands master-development. “For all of our retail properties, we are signing lease deeds… almost on a daily basis,” said Lootah. “These are the big names we are talking to. But, overall, there’s a shift from luxury to a middle-class sort of retail. It suits us fine.”

On retail alone, Nakheel will develop 8.6 million square feet by 2018, and then scale it to a staggering 16.5 million square feet in subsequent years.

Even on residential, Nakheel’s focus is turning to leasing possibilities. Its portfolio after 2018 will swell to 35,677 rented homes, as against the 16,803 units this year.

“There’s no panic in the market... there’re more people moving to Dubai and we can see this from our leasing programme,” said Lootah. “There’s no speculation happening and end-users are active. It all makes for a healthier situation than what we saw in 2009.”