Thursday, Jun 28, 2012

DUBAI (Zawya Dow Jones)--Dubai's Nakheel PJSC said Thursday it is planning to start construction on a 1 billion U.A.E. dirhams ($272 million) extension of the city-based shopping mall Dragon Mart, after the troubled master developer swung to profit in the first quarter of 2012 amid growing signs that the emirate's embattled real estate market might have found a floor.

The Dragon Mart Phase 2 is the latest in a number of retail projects--including a AED25 million retail complex, and a restaurant, retail and entertainment hub opposite Atlantis, both on the showpiece development Palm Jumeirah--that Nakheel has announced in recent months.

"Construction [on Dragon Mart Phase 2] is expected to start shortly on obtaining the necessary regulatory approvals," Nakheel said in an emailed statement, adding that contracts worth about AED600 million are being awarded for the construction of the extension.

United Engineering Construction, or UNEC, has been selected for building the new mall. In addition, two contracts are being awarded to Kele Contracting; one for the construction of the 240-room Dragon Mart Hotel and another for a multi-storey car park for 2,000 vehicles, Nakheel said.

On completion of the expansion in 3Q 2013, the shopping mall would double in size to 335,000 square meters--the equivalent of 47 international football pitches, the statement said.

The developer got into financial trouble in late 2009 after being hit hard by the fallout from the global financial crisis, which saw housing prices in Dubai slump and a property bubble burst. Nakheel ramped up billions of dollars worth of debt during years of spending on some of the world's most extravagant real-estate projects such as Dubai's palm tree-shaped artificial islands.

Nakheel said in April its retail and residential leasing operations continued to perform well with full year 2011 witnessing almost 100% occupancy at its Ibn Battuta Mall and Dragon Mart, reflecting a buoyant local retail market.

-By Tahani Karrar-Lewsley , Dow Jones Newswires; +971-4-446-1686; tahani.karrar@dowjones.com; Twitter: @ZDJnews

Copyright (c) 2012 Dow Jones & Co.

(END) Dow Jones Newswires

28-06-12 0821GMT