Dubai: Union Properties is taking its fellow Dubai developer to court over a land issue. A real estate claim has been filed by Union Properties – which is still trying to find its way back onto a solid financial footing – with the Dubai Courts in this regard.
The legal matter relates to a land in Motor City, of which Union Properties is the master-developer. In a statement on DFM, UP said that a claim was registered ‘due to Dubailand’s failure to issue NOCs (no-objection certificates)’ to it, ‘to benefit from its lands located in the Motor City area’.
This was being done ‘without any legal or contractual basis’.
Union Properties will be informing shareholders of the developments at the upcoming annual general meeting.
Union Properties is pursuing multiple claims on the legal front, not least the one against members of the previous management over the way they had structured some deals and which resulted in losses for the company.
And in 2020, the then management had filed a Dh1.5 billion claim against a local contractor for a project that was completed in 2009. It is not clear whether the claim is being pursued after the current management took over in 2021-22.
The upcoming AGM will be crucial for Union Properties as the management spells out the ways the company could still go through that desired turnaround. (The shareholders' meet called on April 11 was cancelled because of a lack of quorum.)
The company is back in the profit after a disastrous 2021 when losses piled up to Dh1 billion. And the accumulated losses is the other burden UP has been carrying. (On the debt side, the developer is negotiating with Emirates NBD to restructure its obligations and thus buy more time.)
The stock is trading at Dh0.24, close to its 52-week low of Dh0.21.
According to a real estate analyst, "Union Properties didn't get the bounce that other listed/non-listed developers did in Dubai from the 2-year boom in demand. Not having enough new stock to sell has been an issue for Union Properties. Plus the cloud over its operations stemming from that Dh1 billion loss in 2021."