The Dubai-listed Union Properties, whose board was restructured in May, is open to the possibility of a merger or acquiring another developer. The company plans to expand its business to markets in the broader Middle East and North Africa (Mena) region, its chairman said.
“We are open for any good transaction,” Nasser bin Yousef told The National at the Cityscape Global in Dubai, when asked about the possibility of his company’s consolidation with another developer.
He declined to comment on whether the company was in talks with an interested party and if a deal is already on the table.
The real estate sector in the UAE, which recovered well from the 2008 financial crisis, has faced some headwinds in past few quarters.
Oversupply of residential units, difficulties in securing new finances and slower economic growth has pushed some developers to consider gaining scale through mergers and acquisitions.
In August, Abu Dhabi developers Eshraq Properties and Reem Investments said they are considering a potential merger to create the second-largest listed developer in the emirate. Talks are at an advanced stage for the potential deal, where Reem subscribes to a new share issuance offered by Eshraq, which in turn acquires Reem's entire business and assets.
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The deal, which is subject to agreement of final terms and regulatory approval, will be the second significant property market consolidation after Aldar Properties, the biggest-listed developer in the emirate, which merged with rival Sorouh Real Estate in 2013.
Union Properties, one of the oldest real estate developers in the UAE, reported its worst-ever quarterly loss in August after it wrote down the value of investments and booked provisions to cover accounting errors of the firm’s previous management. The company recorded a Dh2.3 billion net loss for the three-month period ending June, which contrasts with a Dh71.7 million profit for the same period in 2016.
Mr bin Yousef, who took over the firm in July after the reshuffle, said the firm had taken the decision to restate the results to “put the books in order”.
“People see this as a paper loss. It’s a valuation loss not a cash loss,” he said at Cityscape on Tuesday, adding that the company’s properties and its land bank remains intact. “We had taken a decision about the pricing of the lands. What did we do was we took fair market value for the assets, and we implemented it, and we took a good provision,” he explained.
The firm, which on Monday launched the Dh8 billion MotorCity master development, which will be built over a period of four years, plans to expand operations in other geographies.
“I don’t want, as new management, to stick to MotorCity forever,” he said, adding that company has been associated with this development for the past 10 years and it is time to “look to other developments in the UAE, outside the UAE and in the Mena region”.
"It is the right time, especially for Union Properties to build our asset value, to build our recurring income so we can enter into bigger projects in other areas [geographies]," he said.
Bullet Train
Director: David Leitch
Stars: Brad Pitt, Aaron Taylor-Johnson, Brian Tyree Henry, Sandra Bullock
Rating: 3/5
History's medical milestones
1799 - First small pox vaccine administered
1846 - First public demonstration of anaesthesia in surgery
1861 - Louis Pasteur published his germ theory which proved that bacteria caused diseases
1895 - Discovery of x-rays
1923 - Heart valve surgery performed successfully for first time
1928 - Alexander Fleming discovers penicillin
1953 - Structure of DNA discovered
1952 - First organ transplant - a kidney - takes place
1954 - Clinical trials of birth control pill
1979 - MRI, or magnetic resonance imaging, scanned used to diagnose illness and injury.
1998 - The first adult live-donor liver transplant is carried out
THE SWIMMERS
Director: Sally El-Hosaini
Stars: Nathalie Issa, Manal Issa, Ahmed Malek and Ali Suliman
Rating: 4/5
How Tesla’s price correction has hit fund managers
Investing in disruptive technology can be a bumpy ride, as investors in Tesla were reminded on Friday, when its stock dropped 7.5 per cent in early trading to $575.
It recovered slightly but still ended the week 15 per cent lower and is down a third from its all-time high of $883 on January 26. The electric car maker’s market cap fell from $834 billion to about $567bn in that time, a drop of an astonishing $267bn, and a blow for those who bought Tesla stock late.
The collapse also hit fund managers that have gone big on Tesla, notably the UK-based Scottish Mortgage Investment Trust and Cathie Wood’s ARK Innovation ETF.
Tesla is the top holding in both funds, making up a hefty 10 per cent of total assets under management. Both funds have fallen by a quarter in the past month.
Matt Weller, global head of market research at GAIN Capital, recently warned that Tesla founder Elon Musk had “flown a bit too close to the sun”, after getting carried away by investing $1.5bn of the company’s money in Bitcoin.
He also predicted Tesla’s sales could struggle as traditional auto manufacturers ramp up electric car production, destroying its first mover advantage.
AJ Bell’s Russ Mould warns that many investors buy tech stocks when earnings forecasts are rising, almost regardless of valuation. “When it works, it really works. But when it goes wrong, elevated valuations leave little or no downside protection.”
A Tesla correction was probably baked in after last year’s astonishing share price surge, and many investors will see this as an opportunity to load up at a reduced price.
Dramatic swings are to be expected when investing in disruptive technology, as Ms Wood at ARK makes clear.
Every week, she sends subscribers a commentary listing “stocks in our strategies that have appreciated or dropped more than 15 per cent in a day” during the week.
Her latest commentary, issued on Friday, showed seven stocks displaying extreme volatility, led by ExOne, a leader in binder jetting 3D printing technology. It jumped 24 per cent, boosted by news that fellow 3D printing specialist Stratasys had beaten fourth-quarter revenues and earnings expectations, seen as good news for the sector.
By contrast, computational drug and material discovery company Schrödinger fell 27 per cent after quarterly and full-year results showed its core software sales and drug development pipeline slowing.
Despite that setback, Ms Wood remains positive, arguing that its “medicinal chemistry platform offers a powerful and unique view into chemical space”.
In her weekly video view, she remains bullish, stating that: “We are on the right side of change, and disruptive innovation is going to deliver exponential growth trajectories for many of our companies, in fact, most of them.”
Ms Wood remains committed to Tesla as she expects global electric car sales to compound at an average annual rate of 82 per cent for the next five years.
She said these are so “enormous that some people find them unbelievable”, and argues that this scepticism, especially among institutional investors, “festers” and creates a great opportunity for ARK.
Only you can decide whether you are a believer or a festering sceptic. If it’s the former, then buckle up.
Kill Bill Volume 1
Director: Quentin Tarantino
Stars: Uma Thurman, David Carradine and Michael Madsen
Rating: 4.5/5
The Two Popes
Director: Fernando Meirelles
Stars: Anthony Hopkins, Jonathan Pryce
Four out of five stars
Blue Beetle
Director: Angel Manuel Soto
Stars: Xolo Mariduena, Adriana Barraza, Damian Alcazar, Raoul Max Trujillo, Susan Sarandon, George Lopez
Rating: 4/5
Company Profile
Company name: Cargoz
Date started: January 2022
Founders: Premlal Pullisserry and Lijo Antony
Based: Dubai
Number of staff: 30
Investment stage: Seed
US PGA Championship in numbers
1 Joost Luiten produced a memorable hole in one at the par-three fourth in the first round.
2 To date, the only two players to win the PGA Championship after winning the week before are Rory McIlroy (2014 WGC-Bridgestone Invitational) and Tiger Woods (2007, WGC-Bridgestone Invitational). Hideki Matsuyama or Chris Stroud could have made it three.
3 Number of seasons without a major for McIlroy, who finished in a tie for 22nd.
4 Louis Oosthuizen has now finished second in all four of the game's major championships.
5 In the fifth hole of the final round, McIlroy holed his longest putt of the week - from 16ft 8in - for birdie.
6 For the sixth successive year, play was disrupted by bad weather with a delay of one hour and 43 minutes on Friday.
7 Seven under par (64) was the best round of the week, shot by Matsuyama and Francesco Molinari on Day 2.
8 Number of shots taken by Jason Day on the 18th hole in round three after a risky recovery shot backfired.
9 Jon Rahm's age in months the last time Phil Mickelson missed the cut in the US PGA, in 1995.
10 Jimmy Walker's opening round as defending champion was a 10-over-par 81.
11 The par-four 11th coincidentally ranked as the 11th hardest hole overall with a scoring average of 4.192.
12 Paul Casey was a combined 12 under par for his first round in this year's majors.
13 The average world ranking of the last 13 PGA winners before this week was 25. Kevin Kisner began the week ranked 25th.
14 The world ranking of Justin Thomas before his victory.
15 Of the top 15 players after 54 holes, only Oosthuizen had previously won a major.
16 The par-four 16th marks the start of Quail Hollow's so-called "Green Mile" of finishing holes, some of the toughest in golf.
17 The first round scoring average of the last 17 major champions was 67.2. Kisner and Thorbjorn Olesen shot 67 on day one at Quail Hollow.
18 For the first time in 18 majors, the eventual winner was over par after round one (Thomas shot 73).
'Doctor Strange in the Multiverse Of Madness'
Director: Sam Raimi
Cast: Benedict Cumberbatch, Elizabeth Olsen, Chiwetel Ejiofor, Benedict Wong, Xochitl Gomez, Michael Stuhlbarg and Rachel McAdams
Rating: 3/5
THURSDAY'S FIXTURES
4pm Maratha Arabians v Northern Warriors
6.15pm Deccan Gladiators v Pune Devils
8.30pm Delhi Bulls v Bangla Tigers
