Union Properties to sell 50% stake in Emicool

Dubai: Dubai-based developer Union Properties is currently in talks with two investors to sell its 50 per cent stake in Emirates District Cooling (Emicool), said Khalid Bin Kalban, vice-chairman of Union Properties.

Bin Kalban refused to identify the investors and put the value of Emicool at Dh400-Dh500 million.

Bin Kalban says that after two consecutive losses this year, Union Properties might take some losses in the fourth quarter.

"As a result of the market situation, we do see that company will end up seeing some loss in the fourth quarter of 2009, however, because of the ongoing handover activity, we expect the company will show some improvement in the core business."

The company has rescheduled bank loans of about Dh2.5 billion, which will be concluded by December 26-27.

Bin Kalban also added that Emirates NBD will lend Union Properties about Dh1 billion to finance the completion of its projects. The company has already received Dh350 million-Dh400 million of this sum.

Bin Kalban said Union Properties is averaging around 15 per cent in default payments. "Up until the third quarter we've seen a minimal default and we anticipate that it will continue," he said.

The firm is currently handing over units in Motorcity and Green Community in Dubai Investment Park. Union Properties' other projects, Index building in DIFC and Limestone building, are scheduled to be handed over in the first quarter of 2010.

Rental portfolio

Unsold units will be transferred to the rental portfolio, which will be around 2,500 residential units that are complete.

"When the majority of the units are sold, we expect to hold a rental portfolio of Dh500 billion from 2010," says Bin Kalban.

Union Properties also carries a land bank of Dh9 million square feet which is due for development in the near future.