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Nakheel secures $4.6bn from Dubai banks to build more islands

A rendering of Nakheel's Dubai Islands plan. It will be made up of five islands housing some 80 hotels
  • Emirates NBD, Mashreq Bank and Dubai Islamic Bank sign deal
  • Package includes extra funds and refinancing for state-owned developer
  • Nakheel has unveiled its plan for the 20-sq-km Dubai Islands project

Dubai developer Nakheel has secured 17 billion dirhams ($4.63 billion) from local banks for projects including its latest collection of manmade islands, the company said on Tuesday.

The state-owned developer best known for Palm Jebel Ali said the financing came from a syndicate of three Dubai lenders: Emirates NBD, Mashreq Bank and Dubai Islamic Bank.

The package is made up of 11bn dirhams in refinancing and 6bn dirhams in additional funds. The money will be spent on Dubai Islands, formerly known as Deira Islands, and other waterfront developments, Nakheel said.

Dubai Islands will be made up of five manmade islands over a total area of 17sq km. It will house over 80 resorts and hotels, 20km of beaches, plus parks, open spaces and golf courses.

A company spokesperson said the financing agreement “reflects the confidence of the banking institutions in the strategic new focus of the company”.

Nakheel was one of the developers worst hit by Dubai’s real estate crash at the turn of the decade, forcing it into a massive debt restructuring.

Dubai’s property market surged in the first half of this year, however, with investors piling in. Russians have been among the top five buyers as they seek to transfer their wealth in the wake of Western sanctions against Moscow.

Residential real estate transaction volumes in Dubai rose 60 percent in the first half of 2022, according to property consultancy Betterhomes. The value of the properties sold in the same period rose by 85 percent.

Dubai’s property market began its recovery early last year after the emirate eased pandemic restrictions faster than most cities around the world.