By Alexander Cornwell and Hadeel Al Sayegh

By Alexander Cornwell and Hadeel Al Sayegh

 

DUBAI (Reuters) - Property developer Nakheel wants recurring income to increase to more than 50 percent of all revenue by 2021 as it opens more shopping malls in Dubai, its chairman told Reuters.

 

Nakheel, the developer of the palm shaped islands in the emirate, expects leasable retail space to more than triple to 17 million square feet in the next three to five years from 4.5 million square feet.

 

"We see good opportunities in retail," Chairman Ali Rashid Lootah said in an interview.

 

State-owned Nakheel expanded two malls on the fringes of Dubai last year, Dragon Mart and Ibn Battuta, and has other sites under development.

Recurring income from non-development segments such as retail and hospitality currently accounts for 30 percent of revenue. Recurring income has increased 213 percent to 2.5 billion dirhams ($680.68 million) since 2010.

"We want it to be ... more than 50 percent" by 2021, Lootah said.

He said a 10.5 percent decline in half-year profit was in part due to a delay in some property handovers which would be made up in the third quarter.

He said the company's profit would be higher in 2017 than the 4.96 billion dirhams reported in 2016, but declined to provide a growth figure.

Property market sentiment in the Gulf has weakened since mid-2014 as volatile oil prices saw governments cut spending, and contractors have complained of delays in payments from some state-back entities.

Lootah said Nakheel was paying contractors on time.

Sister company Limitless would make its December payment on time, its second installment after reaching a restructuring agreement on 4.45 billion dirhams worth of debt with creditors in May, Lootah said.

Nakheel was at the center of a debt crisis in Dubai in 2009 after a crash in real estate prices. It said in August 2016 that it had recovered from a $16 billion debt restructuring with the final payment of an Islamic bond.

The company is now favoring bank loans to finance projects and was not currently considering issuing debt, Lootah said.

($1 = 3.6728 UAE dirham)

(Editing by Kim Coghill)