STOCK Union Properties
Union Properties seems to be making steady progress towards hitting its turnaround stride. The new land deals will come in particularly handy. Image Credit: Virendra Saklani/Gulf News

Dubai: Union Properties is getting some serious funds flowing through as it disposes off non-core land assets.

The Dubai developer has already sold over Dh500 million worth of these assets, marking a 'significant milestone' in the turnaround strategy. "This achievement highlights Union Properties’ strategic vision, robust market positioning and commitment to maximising shareholder value," said a statement.

Just as important, the company is sifting through offers valued at Dh1.2 billion for other land disposals. 

"The company has capitalised on productive opportunities in the Dubai real estate market to achieve this milestone," said the statement.

UP's share price feels the bounce
In early trades on DFM, the UP stock shot past the 5% higher mark, to trade at Dh0.3. In the first 10 minutes, shares traded were at 4 million plus.

Sell some - and retain rest

“We are planning more strategic divestments as we navigate the dynamic market landscape," said Amer Khansaheb, Managing Director. "In line with the 5-year strategy we set in 2023, we will retain approximately 10 million square feet of GFA from our current portfolio for self-development.

"These efforts will pave the way to fostering sustainable growth.”

The successful sale of lands exceeding Dh500 million reflects our belief in the strength of our portfolio and our ability to generate sustainable returns

- Amer Khansaheb of Union Properties

Helping UP's cause is the fact that land values in Dubai have risen significantly in the last two years, and this is a city-wide phenomenon. Union Properties has had access to a significant land bank, built through the years and many of these are in some of Dubai's fast-track emerging locations. And where a new crop of freehold developments are coming.

According to one property analyst, a slimmed down land bank too will serve the developer. "UP given its funding situation will do better taking on strategic projects, any other land bank or built assets can be sold and help with the cash flow."

Wins on other fronts

Recently, the company had two other positives come its way. One was the pursuing of further legal action to win back monies owed by its former chairman, totaling Dh600 million plus.

The second has to do with a debt refinance entered into with emirates NBD, whereby UP was able to get more time to clear off. The latest land sales could help.