Nakheel, a subsidiary of Dubai Holding Real Estate, the real estate development arm of Dubai Holding, has awarded a contract worth 810 million dirhams to Jan De Nul Dredging Limited to carry out marine construction works in the Jebel Ali Palm project, according to a press release on Monday.
Jan De Nul, a subsidiary of the Jan De Nul Group, will be responsible for dredging and land reclamation works, as well as beach enhancement and sand replenishment, to support the construction of villas across the island’s fronds, as stated in the press release issued by the Dubai government media office today.
In early June 2023, Dubai’s ruler, Sheikh Mohammed bin Rashid Al Maktoum, approved a new plan to revive the Jebel Ali Palm project, which was halted during the global credit crisis in 2008, leaving hundreds of buyers in limbo.
The revival of the project comes amidst a resurgence in the real estate market in the emirate, benefiting from an influx of wealthy investors, including Russians seeking to protect their assets, cryptocurrency millionaires, and affluent Indians looking for a second home. This has helped end years of stagnation and led to an increase in property prices and rents.
Jan De Nul expects to complete all marine construction works for the project within two years. The first eight fronds will be ready by the first quarter of 2025, allowing for the commencement of infrastructure and villa construction works.
Following the recent awarding of two major contracts for infrastructure projects, Nakheel has also begun construction of a new main road providing access to the island from Sheikh Zayed Road, as well as road improvements and lighting from the mainland, according to today’s statement, without further details.
The Jebel Ali Palm project, launched last year, offers over 700 units in the first phase of frond villas, scheduled for completion by late 2026. The island spans 13.4 kilometers and features 16 fronds and a 91-kilometer beach, in line with Dubai’s Urban Plan 2040 goal of enhancing public beach access, as stated in the press release.
Nakheel and Meydan Merge into Dubai Holding
In March of last year, Dubai decided to merge Nakheel and Meydan under the umbrella of the government-owned Dubai Holding Group, abolishing the boards of directors of both companies to create a more financially efficient entity with assets worth billions, as reported by the Emirates News Agency „WAM“ at the time.
Nakheel and Meydan have faced numerous crises in recent years. Nakheel was at the heart of Dubai’s debt crisis in 2009, which nearly pushed it to the brink of bankruptcy. Since then, it has consolidated operations, reduced costs, and with government support, now has real estate projects worth billions of dirhams under development.
In November 2022, Nakheel secured financing of 17 billion dirhams (4.6 billion dollars) from a group of local lenders, including 11 billion dirhams for refinancing and consolidating its current debts, and the rest to accelerate the development of new projects, including Dubai Islands and other large waterfront projects.
Population Boom
Real estate sales in Dubai reached a record high of 274 billion dirhams (74.6 billion dollars) in 2023, according to real estate consultancy Knight Frank. Prices in Dubai have risen by 60% since the end of 2020, while rents have surged by an astonishing 83%, according to calculations by Cushman & Wakefield, as reported by Bloomberg last June.
Developers built around 40,000 homes in Dubai last year, with another 39,000 expected to be completed in 2024. Knight Frank estimates that by 2029, nearly 260,000 homes will be built, with apartments accounting for 80% and villas the rest.
So far, population growth has helped the market absorb the new supply. Roads are congested, and schools are experiencing some of the highest enrollment rates in years. Dubai officials expect the city’s population to rise to 5.8 million by 2040, from around 3.3 million in 2021.
In conclusion, Dubai’s real estate market is experiencing a significant resurgence, with major projects like Jebel Ali Palm driving growth and investment in the emirate. The merger of Nakheel and Meydan under Dubai Holding aims to create a more robust and efficient entity to manage the booming real estate sector. With population growth and strong demand for properties, Dubai continues to be a hotspot for investors and developers looking to capitalize on the city’s vibrant real estate market.