Dubai’s biggest listed developer Emaar Properties agreed to fully acquire Dubai Creek Harbour from Dubai Holding for Dh7.5 billion ($2.04bn).
The amount will be paid equally in cash and shares of Emaar Properties, thus making Dubai Holding the second largest shareholder of Emaar, the entities said in a joint statement on Thursday.
The 50 per cent payment in cash includes a deferred payment of Dh1.25bn payable in three equal instalments arranged from available cash and banking facilities, Emaar said in a statement to the Dubai Financial Market, where its shares are traded.
The deal is expected to close on September 27.
“The transaction will be beneficial to Emaar shareholders as it will allow Emaar full control over the strategically located land assets of Dubai Creek Harbour, including entitlement to 100 per cent of its generated profit,” the company said.
The move will also “boost the financial and operational resilience of the combined entity via increased scale and improvement in the portfolio mix”.
Dubai Creek Harbour, a major development located along the emirate's waterfront, features 78.5 million square feet of residential space and is expected to house 200,000 people when complete.
Emaar recorded sales of Dh4.2bn and Dh3.6bn sales in the development in 2021 and in the first half of this year, respectively.
Dubai Creek Harbour currently has about 100 million square feet of future development which will provide future profit potential to Emaar, the statement said.
“The purchase agreement with Dubai Holding represents another important achievement in Emaar’s rich history as we continue to expand our strategic land bank and build sustained value for our shareholders,” an Emaar representative said.
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“We are determined to support the government’s vision for sustainable urban development in Dubai while providing a redefined experience for residents and visitors.”
Dubai's property market has made a strong recovery from the pandemic-driven slowdown as the UAE's economy improves, helped by fiscal and monetary measures.
The market registered 25,972 property transactions in the first quarter of this year, the highest number of quarterly deals since 2010, said Mo’asher, the emirate’s official sales price index issued by the Dubai Land Department in partnership with Property Finder.
The market also recorded the highest number of sales in the month of July in the past 12 years, a report by Property Finder released on Thursday found.
A total of 7,092 sales transactions at an overall value of Dh21bn were registered in July. Sales transaction volumes were up 63.5 per cent on an annual basis, while the value of transactions increased by 88.4 per cent, the report said.
“This is a landmark transaction that benefits both parties,” a representative for Dubai Holding said.
“As joint venture partners, we have created meaningful value in Dubai Creek Harbour and the transaction represents a significant monetisation for us. We look forward to our investment in Emaar as a reference shareholder and the diversification benefits it offers.”
Rothschild & Co is acting as sole adviser to Dubai Holding on the transaction, according to market sources.