On a barren, sandy plot wedged between two luxury hotel developments on the Palm Jumeirah, about 50 men scramble in front of a line of 4x4s.
They yell out their bids, hoping to snap up a Nissan Patrol or a Range Rover at bargain-basement prices.
The auctioneer, dressed in a cream-coloured dishdash, bellows the going price of a white H2 Hummer over a megaphone towards the crowd – “43,000! 46,000! 47,000! 50,000!” Five minutes later, the 2003 vehicle is sold for Dh58,000 (US$15,790).
Car auctions are common in Dubai but yesterday’s sale occurred in a rare setting and involved an unlikely owner – the property developer Nakheel.
Every dirham counts, as Dubai World, the emirate’s flagship conglomerate and Nakheel’s parent company, is expected to sign a final agreement on its US$24.9bn debt restructuring this week.
Yesterday, Nakheel auctioned off 10 of its 4x4s and 10 motorbikes and dune buggies, many of which were used to roam Nakheel’s developments, including its Jumeirah Golf Estates and The World.
There were some bargains to be had. A 2003 Nissan Pathfinder was bought up for just Dh23,000. Another 2003 Nissan 4X4 was bought for spare parts, and six motorbikes together netted Dh19,000.
A custom-made 2009 Range Rover, with cream leather interior, sold for Dh213,000.
Saeed Thani, a retired police officer who came to browse, said the prices were still too steep.
“I want to buy a car … it’s too expensive,” Mr Thani said.
The public auction generated a total of Dh603,000. And on Thursday, Nakheel is scheduled to hold another sale on the Palm Jumeirah, but this time for its surplus construction supplies.
Nakheel, based in Dubai, declined to comment.
The property developer has resumed work on a number of projects since the summer that had been stalled following the global downturn.
Nakheel is also working with clients who have bought homes. About Dh4bn worth of houses, or almost half of the company’s long-term liabilities to buyers, have been swapped for other properties closer to completion in Nakheel’s portfolio.
Under a restructuring proposal unveiled last year, the Dubai Government is injecting $8 billion into Nakheel and converting a further $1.2bn of debt held by the Government into equity. Nakheel is in the process of becoming a separate entity from the Dubai World conglomerate. The property developer is also planning a sukuk issuance to help pay creditors.
Nakheel has recently scaled back on some of its projects, such as cancelling its plans to build the Trump International Hotel & Tower on the trunk of the Palm Jumeirah. It has also pulled out of a joint venture with the French Hypermarket chain Auchan. The original plan was to open 55 stores across the Gulf over 10 years. At the end of last year, Auchan closed its hypermarket in Nakheel’s Dragon Mart after Nakheel said it did not want to proceed with the venture, Still, the Dubai-based property developer announced it had resumed work on a number of projects since the summer that had been stalled following the global downturn. Last August, it announced it was restarting work on six residential projects – Jumeirah Park, Al Furjan, Jumeirah Village, Jumeirah Islands Mansions, Jumeirah Heights Clusters and Al Badrah.