Dubai-based property developer Deyaar Development has received a payment of Dh200 million ($54.4 million) after it signed the final settlement agreement in its land dispute with master developer Limitless.
“We would like to inform our shareholders that the settlement agreement has been signed with Limitless, which in turn deposited the first payment,” the company said in a statement to the Dubai Financial Market, where its shares are traded.
The board of Deyaar had approved the Dh500 million settlement deal with Limitless in June last year, which included both cash and land, Deyaar said at the time.
However, on Wednesday, Deyaar did not say when it expected to receive the remaining amount — in cash or kind.
Deyaar’s deal with Limitless takes into account that “any proposed land [has] the necessary infrastructure and master plan approvals from the relevant authorities, and that such land [is] to be valued by independent external valuers appointed jointly by the two parties”, the company said in its June 2021 statement.
In 2019, a UAE court ordered Limitless, to pay Dh411.9 million to Deyaar in a dispute related to the purchase of land. The court also ordered Limitless to pay fees, as well as Dh61.1 million in compensation to Deyaar.
The acquisition of land through the deal will contribute to the expansion of Deyaar's property portfolio and enable it to consider new projects in the emirate, the developer said.
Property market in Dubai, which made a strong rebound from the coronavirus-induced slowdown last year, has picked up further momentum this year.
With both rents and real estate prices registering significant gains, developers have launched new projects to capitalise on growth opportunities.
On an annual basis, average villa rents were up 22 per cent while average apartment rents rose 15 per cent in the third quarter, according to property consultancy Asteco.
Majority owned by Dubai Islamic Bank, the UAE’s biggest Sharia-compliant lender, Deyaar is the developer behind the Midtown project in Dubai Production City, with an investment of Dh2.6 billion.
In April, Deyaar's shareholders approved a board proposal to write off Dh1.7 billion in accumulated losses through the company’s legal reserve and the cancellation of shares equal to the remaining Dh1.4 billion in losses.
The company reported a more than fourfold jump in its third-quarter profit on higher revenue.
Net profit for the three-month period ended September 30 climbed to Dh36.34 million, while the company's revenue for the reporting period surged 72 per cent annually to about Dh208 million.