Dubai builder predicts improved first quarter

What's Up: Union Properties expecting a windfall in the first quarter this year after transactions in Dubai surged 53 per cent.
Union Properties secured a loan of Dh400m in February from Emirates NBD. Pawan Singh / The National
Union Properties secured a loan of Dh400m in February from Emirates NBD. Pawan Singh / The National

Union Properties is predicting an improved first quarter when it reports its results, after property transactions in Dubai surged 53 per cent.

"The first quarter looks positive, much better than 2011 … and if there is a continuation of that trend it should benefit the sector in the medium term," said Khalid bin Kalban, the chief executive in Dubai.

Investors made 654 land sales, which include apartments, villas and townhouses, between January 1 and March 31, official data from the Dubai Land Department shows, compared with 426 transactions in the year-earlier period.

Dubai's developers have struggled to deal with a drop in property prices since the downturn in the third quarter of 2008, when the global financial crisis froze credit markets and blocked access to funding. Union Properties reported a profit of Dh22.3 million in the first quarter of last year.

"We as Union Properties have two things to deal with: fair value of properties; and the operations of the company," Mr bin Kalban said. "From an operations perspective, we have managed to do well even in the most difficult of years, but it is up to the market to determine what the fair value of these assets will look like."

Union Properties' full-year loss widened from Dh1.53 billion in 2010 to Dh1.57bn last year. But revenue climbed from Dh2.87bn Dh4.92bn in the same period.

The Dubai developer secured a loan of Dh400m in February from Emirates NBD, its largest shareholder, to complete two stalled hotels under construction in Dubai's MotorCity. In January, Union Properties reached an accord with the lender to reschedule Dh2.7bn worth of debt, extending maturities by five years.

The developer is preparing to tender a contract to finish the Renaissance hotel and the Marriott Courtyard, which are about 70 per cent complete, Mr bin Kalban said.

Dubai's stock market has already started to rally, up 25.8 per cent, he added.

 

halsayegh@thenational.ae

Published: April 9, 2012 04:00 AM

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