Dubai's Union Properties slashes debt load to Dh575m

Dubai: The Dubai developer Union properties confirmed it has cut its legacy debts totaling Dh1.47 billion (in 2022) to Dh575 million at the end of 2024. And that it expects the debt load to be slashed further by a further Dh150 million by end March.

"Union Properties was able to reduce the margin on the 3-month EIBOR from 3.25% to 2.75% in light of growing trust among banks," said a statement.

The developer, which recently launched an offplan project in Motor City, also pulled in additional bank loans of Dh150 million to 'fund new investments it intends to make in the coming 18 months'.

"These investments are expected to generate an annual recurring income of approximately Dh40 million," it added.

The UP stock is trading at Dh0.43, a brisk 0.69% spike in early DFM trade.

Debt strategy

The debt restructuring means Union Properties has lowered its financing costs by Dh82 million during 2024 - from Dh114 million in 2023 to Dh32 million.

This improves 'profitability and liquidity'.

"Our growing trust among financial institutions and unwavering commitment to excellence will certainly lay the groundwork for continued success, while also allowing us to address the evolving needs of urban populations," said Amer Khansaheb, CEO of Union Properties.

More good news for UP

The debt cut is the third piece of good news emerging from UP in recent weeks. There was the sale of plots that fetched a handsome Dh1.3 billion, part of its 5-year turnaround strategy announced in April 2023.

The Dh1.3 billion will go towards 'debt settlement agreements and fulfilling preliminary costs for new real estate projects'.

Earlier, it launched the project in Motor City, the 'Takaya', which also marked its return to the offplan after a fairly long absence. A further two projects are heading into launch phase.

Union Properties will retain land of around 10 million square feet of gross floor area (GFA) for development.