Union Properties is divesting non-core land assets and is receiving significant financial backing.
The Dubai developer has achieved a ‘significant milestone’ in its turnaround strategy by selling assets exceeding Dh500 million. The statement emphasized, “This accomplishment underscores Union Properties’ strategic vision, strong market positioning, and dedication to optimizing shareholder value.”
Equally noteworthy, the company is evaluating offers totaling Dh1.2 billion for additional land sales.
“The company has leveraged lucrative opportunities in the Dubai real estate market to reach this milestone,” the statement added.
Sell some – and retain the rest
Amer Khansaheb, Managing Director, stated, “As we navigate the dynamic market landscape, we plan to execute more strategic divestments. Aligned with our 5-year strategy set in 2023, we aim to retain approximately 10 million square feet of GFA for self-development from our current portfolio. These initiatives are geared towards fostering sustainable growth.”
Amer Khansaheb of Union Properties emphasized, “The successful sale of lands exceeding Dh500 million underscores our confidence in the strength of our portfolio and our ability to generate sustainable returns.”
The significant increase in land values in Dubai over the past two years, a trend observed citywide, supports UP’s position. Union Properties has accumulated a substantial land bank, particularly in rapidly developing areas of Dubai and locations earmarked for upcoming freehold developments.
According to a property analyst, reducing the land bank will benefit the developer. “Given its funding situation, UP will perform better by undertaking strategic projects, and any surplus land bank or built assets can be sold to improve cash flow.”
Wins on other fronts
Lately, the company has gained two extra advantages. Firstly, it initiated further legal actions to reclaim funds owed by its former chairman, totaling over Dh600 million.
Secondly, there is a connection to a debt restructuring undertaken by UP with Emirates NBD, affording them an extended timeframe for repayment. The recent land sales could prove beneficial in this regard.
