Indebted Dubai developer Nakheel, whose extravagant projects spurred the emirate's debt crisis, reported a first-half net profit on Monday as it handed over stalled projects. Nakheel, which built man-made islands shaped like palms and a map of the world, said it posted a profit of 526 million dirhams ($143 million) in the six months to June. It gave no comparison for 2010.
"The profits make positive headlines but the underlying details are not clear," said Ian Albert, regional director for Colliers International. "I would think these profits are from payments made for projects that have been promised years ago and finally delivered now. They do not necessarily indicate much about the health of Dubai's real estate market."
Nakheel was at the centre of Dubai's property collapse in 2008 when house prices plunged by about 60 percent, forcing many developers to abandon projects. The developer wrote off up to 78.6 billion dirhams ($21.4 billion) of its real estate assets due to the crisis, according to a bond prospectus released earlier this year. Nakheel completed a $16 billion debt restructuring earlier this year and is now wholly-owned by the Dubai government, as arranged under former parent Dubai World's own restructuring.
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