Real Estate

Union Properties looks to buy distressed assets, diversifying away from real estate

Waheed Abbas/Dubai
Filed on August 16, 2020

(KT file)

Property developer, Union Properties, is looking at acquiring distressed assets in the healthcare, education, and hospitality sectors to diversify its portfolio, its chairman said on Sunday.

"We are not purely doing constructions. We are diversifying away from real estate, exploring certain good assets across the UAE. They could be in different fields, available at discounted rate," Khalifa Hasan Al Hammadi told Khaleej Times in an interview on Sunday.

"We do have a budget for acquisition and the banks are also willing to finance it. There is no limitation of acquisition - it could be millions or billion - as long as the asset has value and income and is available at discounted rates. There are too many distressed assets today in the marke," added Al Hammadi.

The master developer of Dubai Motor City also announced the completion of its three-year "Strategic Blue-print Pan" which includes the initial plans to launch its new project Motor City Hills. The Dubai-listed company recently signed a deal with Emirates NBD bank to restructure its Dh946 million outstanding debt.

The Dubai-listed firm's shares on Sunday ended lower by 0.9 per cent to Dh0.327 per share

The company is also looking at all solutions whether it is capital reduction or hike for the turnaround. It posted a net loss of Dh38.56 million in the second-quarter as compared to Dh121.86 million in the previous quarter owing to massive cost-cutting measures taken by the property developer.

Dubai property market outlook

While commenting on the Dubai property, Khalifa Hasan Al Hammadi said the market is picking up after Covid-19 and the recovery will gather pace in early next year.

"The market's recovery has started as supply is going to reduce. This is a starting of the cycle. By the end of Q1 2021, the cycle will move well," he added.

"The market is very economical. In two years, the return on property investment could double," he added.

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