Monday, March 22, 2010

Union Properties announces assets for sale

Union Properties has expressed its willingness to sell any of its projects, if it receives a reasonable price, the Chairman of Union Properties revealed.

Being the third-largest developer in the UAE, it has been hit by the global economic recession, which had led to fall in property prices within the emirate by up to 50 percent from their peak in 2008.

The developer has received offers for its Ritz Carlton Hotel in Dubai, which, the Company is planning to sell for Dh.1.5bn ($408.4mn).

The completed projects of the Company have met their investment targets, and therefore it is not alarming when the company offers them to investors for sale, particularly, when there are other major projects by the company that are underway, said Khalid bin Kalban.

The buyers are mostly investment companies or individuals seeking to purchase completed and rented properties with an income of 7 to 8 percent, he said.

The funds, so collected from asset sales will be utilized to repay financial commitments and to finance other property projects that are in progress, Kalban said.

Union Properties had recorded a quarterly loss for the third time in a row, on provisions for contracting and property revaluation. The company currently has an outstanding debt of Dh.6.5bn, out of which Dh.2.8bn had been re-scheduled for payment to 2011 from 2009, with the reminder maturing the long-term.

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