Dubai: Amlak Finance could accelerate volumes in real estate lending as it looks a lot healthier than it did post the property crises of 2008, analysts said, even as it waits for necessary approvals to re-start trading on the Dubai Financial Market after a gap of seven years.
On Sunday, Amlak, in which Dubai’s biggest developer, Emaar Properties, owns 48 per cent stake, said its board approved an increase in share capital and agreed to the issuance of an Islamic financial instrument convertible into shares up to a maximum of Dh2.1 billion.
The move will be the first step in getting the company back on track after the property crises in 2008. In August, the company’s financiers had approved of a restructuring package.
The company has been undertaking a number of austerity measures to tightly manage costs, delinquencies and liquidity over the past six years, including reducing its exposure to non-core real estate assets and strengthening its collection procedures. In view of its stabilising operations, Amlak started to offer mortgage financing again earlier this year.
“With a planned capital increase and a new convertible, Amlak is strengthening its capital base. Together with an improving real estate market, improving the value of its property investments. Amlak should become financially viable company,” Jaap Meijer, executive director at Arqaam Capital said. “The picture has changed 180 degrees for the company,” he added.
Dubai’s property sector has rebounded strongly in the past two years, with the prices of some properties returning to 2008 levels. This has improved the fortunes of Dubai state-linked entities which did debt restructuring deals after the crash.
“Amlak is unable to speak until a number of formal steps have been completed and the company has received formal approval to be readmitted to the DFM,” the company told Gulf News in a statement on Monday.
“Amlak will continue to provide information on the progress of its restructuring when it is able to do,” the statement added.
The company, which aims to list its shares on the Dubai Financial Market in 2015, was delisted from the DFM in 2008 in light of a pending merger with Tamweel.
“Amlak has taken a number of strategic measures over the last few years to focus on its core property financing operations and reduce its exposure to real estate assets and we continue to work hard with all our stakeholders in returning to market,” Arif Al Harmi, CEO of Amlak, said on September 28.
