Dubai: Union Properties confirmed that talks are on with multiple banks to set up new debt repayment terms like the Dh946 million one it did with Emirates NBD last week.
“That Dh946 million represented nearly the whole exposure the UP Group has with various lenders,” said Fathi Ben Grira, Vice-Chairman at Union Properties. “That we managed to renegotiate terms - both on the tenor and payment terms with our biggest lender is a major win.
“Yes, talks are on with other lenders and we are confident we will be able to strike similar understanding.” (What the size of the other outstanding amount was not mentioned.) Indeed, the Emirates NBD deal frees up more time for Union Properties to focus on its core activity, i.e., developing and launching new projects. Recently, it did announce it is working on a new mixed-use project, off Mohammed Bin Zayed Road.
The formal launch will happen when “it’s the right time”, the vice-chairman added. “It will come up on land that we already have - that’s one big plus,” said Ben Grira.
Going to ‘disrupt’
On where the ‘Motor City Hills’ would feature within Union Properties’ portfolio of projects, completed or otherwise, he said: “This much I can assure the market - it will disrupt the real estate marketplace as know it today.”
The developer’s confidence stems from progress attained on a corporate-wide restructure and the debt deal with Emirates NBD, both of which are reflected in the second quarter numbers. Losses were reduced by 68 per cent - at Dh38.56 million - from the first quarter, while expenses totalled Dh58 million from Dh76 million between January to end March.
Earlier this year, there was talk about a a major Chinese construction company coming on board as a full-fledged investor-partner into Union Properties. The Dubai developer had even issued a statement talking up such a possibility of a Dh300 million deal.
“But then it’s whole different world after the pandemic,” said Ben Grira. “We will pursue such a deal if we need to and when the time is right. China’s National Construction Company is already associated with multiple projects with us… let’s see what happens. There’s no need to rush anything.”
Sizable foreign buying
The vice-chairman pointed to the substantial activity involving its DFM-listed stock and foreign investors. “Especially, foreign institutional investors had been active in the first quarter and these are long-term players,” he added. “Obviously, they have been interested by the restructuring efforts that are already showing results and the quality of the assets we hold.”
Acquiring new land is not an immediate priority, but the company remains open to forming partnerships with other developer-investors if there is merit in doing so. “But buying up new land and use up the cash we have - No!” said Ben Grira.
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“I understand there’s a lot of speculation out there in the market - but such talk is coming from outside the company. Inside, we know what we are doing… and we know how to deliver it. We truly believe it’s the beginning of a new era for the company.”
On whether he see any potential clouds - other than the pandemic out there - Ben Grira said: Dubai is one city where we don’t get to see to many clouds. But if it rains, there are always umbrellas.”
The new project will have a GFA of 2.9 million square feet, off Sheikh Mohammed Bin Zayed Road. It will be the first launch making up Union Properties’ newly minted three-year plan for a full and final turnaround.