Stock Union Properties Dubai
Marshaling a turnaround strategy is the new management at Union Properties... and it seems to be paying off. Image Credit: Ahmed Ramzan/Gulf News

Dubai: Union Properties, the Dubai developer, has swung back into profits, reporting Dh348.8 million for the first nine months of 2020. Its third quarter net was Dh509.2 million, brought on by strategic divestments of its portfolio.

In the process, it has also brought down accumulated losses below the critical 50 per cent mark to 41.8 per cent. With the profits being struck, the company has "cleared all losses for 2019 as well as for the first and second quarter of 2020."

Dh6.2billion

Current asset base of Union Properties (as of end September, 2020)

It was recently that Union Properties confirmed headway in coming up with a three-year turnaround plan. Plus, there was the milestone debt restructure agreement with Emirates NBD for Dh946 million. Recently, there was also the sale of a stake in Dubai Autodrome that fetched Dh400 million.

"From day one our commitment has been to restore the prestige and credibility of Union Properties," said Khalifa Hasan Al Hammadi. "In the span of three months, we have restructured the bulk of our debt, substantially reduced our operating costs and reinstated our credit reputation.

"Our major achievement has been without a doubt the successful restructuration of our balance-sheet notably by integrating an unclaimed GFA (Gross Floor Area) owned by our Group."

Work in progress

The company still has legacy issues to deal with. Accumulated losses totalled Dh1.79 billion as of end September. This stems from a fair value loss of Dh2.07 billion related to investment properties recorded in 2017 and impairment of Dh503 million recorded the same year.

"The Group would like to highlight that these accumulated losses are predominantly due to variations in the valuations of its real estate portfolio," it said. "These accumulated losses could potentially be recouped in the event of an increase in the prices of land in Dubai."

Now that we have cleaned and restructured our balance-sheet and transformed Union Properties into one of the most solid and transparent companies listed on the Dubai Financial Market, all our focus will be on our
operations and business development

- Khalifa Hasan Al Hammadi of Union Properties