Dubai: Union Properties has decided to sell its Auto Mall development in Dubai Motor City for Dh525 million to a local entity, Texture Global Investments.
The developer had initially planned to hold on to the asset as part of a plan to develop its income generating side of the business. In fact, it had planned to recast the two-stores mall’s profile as one geared towards the automotive and accessories retail business into one that is more of a general purpose shopping facility. It was felt that doing so would fit in with the community needs of the wider Motor City development, which is steadily expanding its residential base.
It is not known what made the developer change its plan and now sell off the asset. But, according to market sources, the Dh525 million looks a good price to get for the mall, which will still need to go through the conversion process to turn itself into a community destination.
The mall will have as many as 150 stores across 450,000 square feet of leasable space. “we will not be part of the conversion project but will leave it to Texture to set the programme,” said a Union Properties spokesperson. “It is in line to be completed by late 2016.”
Union Properties had seen a sharp drop in its 2014 net profits, totalling Dh858.7 million, down from 2013’s Dh1.58 billion. Revenues were shaved by more than 50 per cent to Dh2.06 billion. The developer had said the lower net profits had to do with setting aside higher provisions.
“The sale proceeds from the sale of Auto Mall will be deployed in our other development streams,” the spokesperson added. The developer recently launched the third phase at Green Community, its flagship development.
The scrip closed 10 fils lower to Dh1.08. Over a 12-month period, the share is down by more than 40 per cent.