Union Properties is in negotiations with contractors for the completion of two hotels at its MotorCity development in Dubai. The Renaissance Dubai MotorCity and the Marriott Courtyard, which are about 75 per cent finished, have been at a standstill while the developer raised cash to complete construction.
Khalid bin Kalban, the chairman of Union Properties, said the company was in discussions with a number of contractors as part of a plan to resume work on developments that are close to completion. Nasa Multiplex, the original contractor for both hotels, is involved in the talks but is not guaranteed to be rehired. "The market has changed fundamentally so now we're looking to get a reasonable rate," said Mr bin Kalban. "Whoever gives us the better price, we'll go along with it."
Both hotels, which will have a total of almost 600 rooms, were due to be completed last year as part of the sprawling motor racing-themed development that includes hundreds of homes and offices. Work on F1-X, a Formula One theme park, was also put on hold last year because of a shortage of credit. Union Properties, the third-largest developer in Dubai by market value, hired the consultancy Ernst & Young late last year to raise finance for the theme park's completion, although work is yet to resume.
Union Properties is selling some of its prized assets to pay debt and help revive stalled projects. The developer said in February it had US$3.8 billion (Dh13.95bn) worth of sellable assets. Mr bin Kalban said two potential buyers were considering taking a 50 per cent stake in Emicool, its district cooling unit, which had been valued at between Dh400 million and Dh500m. "The evaluation has been done and we are awaiting their response," he said.
Meanwhile, the company is still finalising "the legalities" of the sale of its Ritz-Carlton Hotel at Dubai International Financial Centre to a UAE buyer, having just missed the asking price of Dh1.5bn, Mr bin Kalban said. Union Properties, which is 47.69 per cent owned by Emirates NBD, accumulated Dh6.5bn of debt during the boom, of which Dh2.8bn has been rolled over for repayment to next year from last.
The developer reported a loss of Dh349.4m for the second quarter, up from a loss of Dh227.9m in the same quarter last year, as it took provisions on falling property values and recorded few handovers of homes to buyers. @Email:email@example.com