AL Nakheel

Industry Profile: Construction and Real Estate Developer.

One of the most key drivers of Dubai’s economy is the Construction Industry and it is also one of
the highly employed sectors across the UAE. Dubai is famous for its sky scrapping buildings and
its eye catchy infrastructure, these tall buildings is a major attraction for tourism. Dubai in its early
days was a Barren land with no natural resources and through years of struggle and failing to
sustain an economy, Dubai decided to shift to tourism. The major question was why people would
come to a desert where there is no greenery and with such weather condition. Dubai then came up
with artificial parks, beaches, palm tree shaped residential area, high network and link of
transportation and aviation, Burj Khalifa and other tall buildings. Since then construction industry
was a part of building Dubai tourism. The strength of the infrastructure has made Dubai, one of
the ultra mega cities in the world. With the introduction of Value-added tax (VAT) earlier this
year, which meant on higher costs to clients in advance of the implementation, even then the
industry didn’t stop moving ahead. The Industry decided not to have any changes on ongoing
projects and newly signed prior to the new taxation law.

The construction Industry had boomed since then and will take a next step to the future of
Infrastructural development with Dubai World Expo 2020. Dubai is ready for a big change with
Expo 2020 especially the Construction Industry and Tourism Industry. The Infrastructure
development of expo will include investment in tourism-related projects, commercial
infrastructure and the transportation development (aviation and metro & mono rail). There will be
more infrastructural diversification in field of healthcare, education and residential support as well
and thus create more job opportunities and entry of foreign companies.

According to GCC and a published data there are 4000+ active projects worth of $313.6 billion
for the Expo 2020 is under progress and from that 3200 active projects are of Construction Industry
with an estimate of $245 billion. This shows the part Construction Industry plays in the economic
growth of Dubai. The current mega projects in the field of construction industry are Dubai Metro
Red Line extension, Container Terminal 4 of Jebel Ali port expansion project, the Royal Atlantis
Resort and Residencies located in Palm Jumeriah, and the Dubai Harbor Creek Project- a
waterfront development spanning more than 20 million.

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Company Introduction:

Nakheel means palms or palm trees in Arabic; the company chose this name because Palm trees
are the national tree of Dubai. Nakheel is a real estate developer in Dubai and they are the hands
behind many of Dubai’s sky scrapers. It is founded 18 years and it is a government owned
construction and Real Estate Company. The executive chairman of Nakheel is Ali Rashid Lootah
and CEO is an Indian Named Sanjay Manchanda. Nakheel serves more than 84 countries and
engaged in infrastructural projects only. The company employees around 1500 employees and is
providing more job opportunities by outsourcing the Human Resource needed. Some of their
famous projects are the Palm Island, the Dubai Waterfront, the world and universal Islands and its
residential projects include the Dragon mart and Ibn Battuta mall. The main competition of
Nakheel is the residential developer in Dubai Emaar Properties. Both of them are now expanding
worldwide as Nakheel is engaged in a project in USA and Emaar is expanding themselves in the
Asian Countries specially India. Both the companies hold the major share in the construction and
real estate industry. Nakheel hold around 30% and the other 40%. Nakheel flagship projects are
the ‘three man made palm tree shaped island in the coast of Dubai. Nakheel is a subsidiary
company of Dubai World, which is ventured by the Dubai government. The palm is made adjacent
to the marine. The palm island is created for attracting tourism and focused towards business
tourism. The tagline of Nakheel is “Where Vision Inspires Humanity”. Nakheel shares a vision
which actually belongs to the late Sheikh Rashid Saeed Al Maktoum, the previous ruler of Dubai.
The palm island project cost an estimate of $12bn. The Company announced another two project
on Palm Jumeriah at a combined cost of 3.3 million Dirham. In June the company sold around

350 villas for 1.4 Million Dirham in just 5 hours. Nakheel stand to create truly iconic developments
that make a huge contribution to people’s life and creating opportunities. The estimated Revenue
of the company is AED 5.67bn at the end of the financial year 2017. It was the highest net profile
in the history of the company.

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The projects of Nakheel are the residential, retail, hospitality and leisure sectors. Their completed
projects are Palm Jumeriah, The world, Deira islands, Jumeriah Village, Jumeriah Park, Jumeriah
Heights, The Gardens, Discovery Islands, Al Furjan, Warsan Village, Dragon City, International
City, Jebel Ali Gardens and Nad Al Sheba. Their current and future projects include Ibn Battuta
Mall, Dragon Mart 1 & 2, Golden Mile Galleria, Nakheel Mall, The Pointe, Deira Mall, Deira
Islands, Night Souk, Al Khail Avenue, The Circle Mall and Nad Al Sheba Mall and Warsan Souk.
These projects USP are the extraordinary infrastructure and design. Nakheel understood the
importance of Infrastructure in the scenario of Dubai Tourism. So every design, every
infrastructure holds a strong identity and wants to make a new mark in the world like the flagship
project Palm Jumeriah, which is unique and remember as one, Nakheel tries to incorporate the
same in its every project.

Al Nakheel has several projects under its sleeves for Dubai World Expo. One such in the pipeline
of projects is Deira Islands, a four- decided, mixed-use waterfront development which will add
more than 40km, including 21km of beachfront area to Dubai’s already existing coastline and this
will provide more infrastructure for the development of a number of Hotels, Resorts and Spa,
residential colonial apartments, retail and shopping centres near Jumeriah Beach. Nakheel will
provide special payment plans and incentives (discounts) for these privates to build on the Palm
Island. More road bridges and connecting roads will be constructed for easy accessibility to the
main Island and outside area. The South Island will be architecture as a unique creek side
destination. There will be a variety of attraction including a night market in the style of an Arabic
ardor; 250- rooms’ hotel, a movie house with a capacity of 30,000 people at a time and to build a
harbour which can support larger yachts. The other 3 Islands, North Island, West Island and East
Island will have more infrastructures related to accommodation facilities like hotels, resorts and
spa, commercial and retail shops. The other projects in the pipeline are related to the flagship
project- Palm Jumeriah and these are; Palm Jumeriah Boardwalk, Palm West beach, Nakheel Mall
and Hotels and to increase the number of residential Units on Palm Island.

Market Overview

At the beginning of the 2015 the UAE property market has witnessed decline in sale prices, which
averaged about 9.6% across all submarkets. Hospitality sector which is one of the most attractive

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sectors in the region has witnessed hotel occupancy down by -1.4% in 2015, although the
hospitality sector performance is still strong in global context. Various offers from real estate
companies in UAE aims to encourage investment and to pour interest in the emirate’s real estate
sector is likely to impel the UAE property market growth in coming years. Moreover, developers
are taking more aggressive and imaginative approach to grabbing the deals and getting significant
presales off the ground amid growing competition and fear of a downturn in the UAE property
market. According to Goldstein Research, amid declining oil prices, milestone such as Expo 2020
and the introduction of VAT will play an important role in improving the UAE’s property market.

Goldstein Research analyst forecast the UAE property market to grow at a CAGR of 7.4% during
the forecast period 2016-2024. Further, the UAE property market accounted for the USD 74.3
billion in 2016 which is likely to reach USD 132.5 Billion by the end of 2024 attributed to the
growing tourism and rising foreign investment in real estate sector.

Covered in this UAE property market report

The report covers the present ground scenario and the future growth prospects of the UAE property
market for 2016-2024 along with the total revenue of real estate sector in every region. We
calculated the market size and revenue share on the basis of revenue generated per segment and
region on country level. The revenue forecast is given on the basis of number of real estate
developers and current growth rate of the market.

UAE property Market Segmentation

By Property Type

 Residential Land
 Apartment
 Hotel
 Industrial
 Office
 Retail
 By Ownership Type

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  Buy
 Rental

By Investor Type

 Equity / Institutional funds Private

 Unlisted companies
 REITs / Listed companies
 Occupier
 Unknown
 Cross-Border

Based on ownership type, buyers segment accounted for the largest market share of more than
62% in 2016, but average property prices in UAE have dropped by +1% in the same year. On the
other hand, rental property industry is the fastest growing segment owing to continues declining
rental prices of residential and hotel properties.

UAE property Market Outlook 2016-2024, has been prepared based on an in-depth market analysis
from industry experts. The report covers the competitive landscape and current position of major
players in the UAE property market. The report also includes porter’s five force model, SWOT
analysis, company profiling, business strategies of market players and their business models. UAE
property market report also recognizes value chain analysis to understand the cost differentiation
to provide competitive advantage to the existing and new entry players. Emaar, Damac Properties,
Nakheel Properties, Deyaar, Union Properties, Ras Al-Khaimah Properties (RAK Properties),
Meeras Development, Aldar Properties, Dubai Properties, Jabal Omar Development Co, United
Development Company, Wasl Asset Management Group (Wasl Properties), Arenco Real Estate,
Ezdan Holding, Barwa and Talaat Moustafa Group Holding.

According to our UAE property market study on the basis of extensive primary and secondary
research, one major trend in the market is the declining prices of rental apartments and villa in
UAE, which is likely to impel the growth of property rental industry in the region. Affordable
villas in Dubai continue to be the hottest property in UAE. According to the report, major driver
in UAE property market is the growing transaction value and investment in UAE’s real estate
sector, which has resulted in the number of new development projects in UAE’s property market.

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Dubai is presently, perceiving increasing interest from international investors, which has
reinforced confidence in UAE’s real estate sector and its future prospects.

DUBAI TOURISM INDUSTRY

Key Drivers
Dubai over the last three decades has become one of the global hub for travel & tourism and is one
of the top destination for global travellers and has managed to become centre of attraction for
leisure and business visitors. It offers guests or visitors with some great multifaceted destinations
combining beaches, deserts, luxury hotels, shopping, entertainment etc. Dubai with population
base of 2.3 million receive seven times as many tourists annually.

By the end of 2016 December, 15 - 16 million tourists visited Dubai and this number is expected
to reach 20 million by 2020, according to Dubai’s Department of Tourism & Commerce Marketing
(DTCM). Dubai accounts for 66% of the tourism industry’s contribution of the GDP of UAE.

Some of the key drivers for Dubai Tourism are: -

 Dubai Tourism focuses on hotels, restaurants, sightseeing, business meetings, incentive,

travel services, destination, beach, thematic tourism, culture etc.
 Dubai is adding hotel supply in their existing portfolio i.e. in luxury, upscale and upper
upscale hotel room segment.
 Dubai’s world class infrastructure and business friendly environment has attracted several
international tourists and companies, food chains etc.
 Dubai government is taking various other initiative to boost tourism further.
 Expansion in network of Etihad Airways and Emirates airline and its interconnection
between Abu Dhabi and Dubai.
 From traditional restaurant serving the local dishes to entertainment which are of world
class, Dubai offers everything to their visitors.
 Dubai offers perfect mix of cosmopolitan city with traditional aspect of local culture.
 Tourists or visitors will feel great energy and spirit irrespective of where they go in Dubai.

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Key Attractions

Some of the key attractions in Dubai are:-

 Burj Khalifa
Burj Khalifa is the tallest building in the world at 829.8m and the most famous of the city’s
point of interest. It is Dubai landmark building. With breathtaking view of the city skyline,
At the Top, which spreads across levels 148, 124, 125 and the price vary according to the
observation deck chosen and at what time of day. Burj Khalifa is wrapped by beautiful
designed gardens, with winding walkways. In Burj Khalifa, there are plenty of water
feature as well including Dubai fountain, the world’s tallest performing fountain.

 Dubai Mall
Dubai mall is the city’s premier mall and provides entry to Burj Khalifa and also to Dubai
Aquarium. There are so many entertainment option within Dubai Mall such as ice skating
rink, gaming zone, cinema complex etc. Tourist can enjoy unlimited shopping and food
within Dubai mall and almost everyday some special events are been organized such as
live music shows, fashion show etc.

 Dubai Desert Safari

Dubai Desert Safari is the ultimate travel experience for the visitors and it consists with
4x4 dune bashing, camel rides and mouth watering barbeque dinner accompanied by a
belly dance performance.

 Dubai Hop On Hop Off Bus Tours

In Dubai Hop On Hop Off Bus Tour, visitor can enjoy any dubai sightseeing and attraction
in a fun and convenient way by stopping the bus at any attraction place at their own
leisurely pace. Tourists can experience the best of Dubai with fabulous saver combos and
can visit attraction like Burj Khalifa, Dubai Aquarium, Ski Dubai, Bollywood Park, Marina
Cruise etc.

 Burj Al Arab
It is world’s third tallest hotel and one of the most famous tourist’s landmark in Dubai. It
comes under among the top five iconic hotels in world. Burj Al Arab has taken luxury
service at another level. Guests have access to service on par with royalty and fine dining
alike. Gold interiors, lush suits, the finest delicacies - Burj Al Arab stands above par with
any other hotels.

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  EXPO 2020 Expo 2020 is the World Exposition which will be held in the year 2020 in
Dubai, UAE. The last 'Expo' was in Yeosu, Korea in 2012, the next one will be in Milan,
Italy in 2015, and one is scheduled for Astana, Kazakhstan in 2017 before the Dubai Expo
in 2020. Cities bid to win the right to host an Expo, similar to how cities or regions bid to
host the Olympics. Perhaps the reason the Expo 2020 logo has been seen all over the world
recently is because The 2020 Expo host city winning bid was selected recently (27
November 2013) and so the bidding cities and the elections have been profiled in the media
a fair amount, especially in the second half of 2013 and Dubai, in the United Arab Emirates,
who won the bid to host Expo 2020, REALLY WANTED to win the bid. They advertised
themselves as a candidate city all over the world, presumably in hopes of creating a buzz
and helping to push their bid to the top of the candidate city list. Obviously, it paid off in
the end.

Benefit Offered

 Recently, UAE government decided to cut the service charges at hotels to 7% from 10%
earlier, as it will make the hotels more affordable thus making Dubai the most preferred
destination.
 Flyers passing through UAE toward their onward destination can get a transit visa for 48hr,
free of charge, to spent some time in UAE to experience and explore the sightseeing,
destination etc.
As Dubai is emerging as prime destination for medical tourism, UAE declared 10 yr residency
visas for investor and specialists that will encourage medical professional to UAE

Tourism and economy

In 2016, the direct contribution of the travel and tourism sector to the UAE’s GDP was AED 68.5
billion (USD 18.7 billion) which is equivalent to 5.2 per cent of the total GDP. It is forecast to rise
by 5.1 per cent per annum from 2017 to 2027 to AED 116.1 billion (USD 31.6 billion) which
would be equivalent to 5.4 per cent of the total GDP in 2027. The total contribution of the travel
and tourism sector to the UAE’s GDP was AED 159.1 billion (USD 43.3 billion) which is 12.1
per cent of GDP. It is forecast to rise by 4.9 per cent per annum to AED 264.5 billion (USD 72
billion) which would be 12.4 per cent of GDP in 2027. The travel and tourism sector directly
supported 317,500 jobs in the UAE which is 5.4 per cent of total employment. This is expected to
rise by 2.4 per cent per annum to 410,000 jobs which would be 5.9 per cent of total employment
in 2027. The total contribution of travel and tourism sector to employment, including jobs
indirectly supported by the industry was 10.4 per cent of total employment which was 617,500
jobs. This is expected to rise by 2 per cent per annum to 770,000 jobs in 2027 which would be 11.1
per cent of total jobs. Investment in the travel and tourism sector was AED 26.2 billion (USD 7.1
billion) which amounted to 7 per cent of the total investments made. It is forecast to rise by 11 per

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cent per annum over the next 10 years to AED 74.5 billion (USD 20.3 billion) in 2027 which would
be 11.2 per cent of the total investments.

DUBAI JEWELLARY INDUSTRY (The gold souk)

Market Overview
The gems and jewelry market seems composed of a glittering future. Increased appetite of jewelry by the
consumers was reduced because of recession but now it appears more ravenous than ever. This is most dynamic
and fastest growing industry. The jewelry players will be left behind if they are not alert and responsive to the
important trends and development. Government policies in UAE such as zero taxation and minimal duty on
luxury products are the two major aspects which are fostering the growth of UAE gems and jewelry market.
Goldstein Research analyst forecast the UAE gems and jewelry market size is set to reach USD 70.10 billion by
2024, growing at a CAGR of 7.30% over the forecast period i.e. 2016 to 2024. Due to tax free policies and
transfer pricing legalization, the demand for fine diamond jewelry in Dubai showcases green growth.

Market Segmentation
By Jewelry Type
 Gold Jewelry
 Diamond Jewelry
 Gemstones Jewelry
 Silver Jewelry
 Platinum Jewelry

By Category

 Branded Gems and Jewelry

 Unbranded Gems and Jewelry

By Distribution Channel
 Exclusive Showrooms
 Multi Branded Jewelry Showrooms
 Online

Market Share & Forecast to 2024

On the basis of product type, gold jewelry held the largest market share of 46.4% of the overall UAE gems and
jewelry market in 2016 and is likely to dominate the market throughout the forecast period due to the increase
in demand for exclusive and designer jewelry. Gold is available in many variants from 18K to 24K, to ensure
the needs of customers globally. Whereas, on the other hand diamond jewelry segment contributed the second
largest market share of 31.2.0% in 2016 on the back of emergence of vintage jewelry. In addition, the diamond
jewelry gives more margins to the retailers than the gold jewelry; this is one of the significant factors which push
the retailers to offer diamond jewelry to the customers.
Based on geography, Dubai leads the UAE gems and jewelry market by 52.0% market share as tourists find it
cheaper than their home countries because of the less taxes and duties and its fine range of designing jewelries.

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Dubai exports its gems and jewelries to about 180 countries worldwide. However, Abu Dhabi gems and jewelry
market is increasing steadily with a growth rate of 21.0% over the forecast period due to its clean and classic
western to lavish, rich Arabian wedding jewelry designs. Middle East region is the leading center for the trade
of gems and jewelry products.

Trending in UAE Gems and Jewelry Market

According to our UAE gems and jewelry market study on the basis of extensive primary and secondary research,
“the major trend is the recent merger and collaborations between jewelry players and apparel brands. The apparel
industry is about ten times the size of the jewelry industry as measured in annual sales, but the average value in
apparel (USD 14.25 billion) is almost 20 times that in jewelry (USD 0.8 billion). For instance, brands like ZARA,
H&M, and Guess etc. are expanding their assortment in this sector as well.”

Drivers & Barriers to Market Growth

According to the report, the major driver of the UAE gems and jewelry market is the internationalization and
consolidation, the growth of branded products, a reconfigured channel landscape, “hybrid” consumption, and
fast fashion. Due to increase in number of tourists visiting and purchasing gems and jewelry are driving the sales
of UAE gems and jewelry market.
Further, the report states that the major challenge for the industry players is that the gems and jewelry industry
is decaling as the consumers are more keen in buying the other luxury products like couture brands, designer
clothes, smart-gadgets and travel sector. The lack of promotion of the gems and jewelry industry has led to a
declining interest among the consumers.

Key Market Players

Our UAE gems and jewelry market report comprises of the following companies as the key players.
 Damas International
 Swarovski
 Joyallukas
 Tiffany & Co.
 Cartier
 Malabar Gold and Diamonds
 Titan International
 EVA Gems
 DIMEXON
 Kapu Gems
 DAMIANI
 The Gold and Diamond Park
 The Gold Souk and Geetanjali Gems

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