Skip to content Skip to Search
Skip navigation

Union Properties finalises $162m deal to restructure its debt

Dubai MotorCity Creative Commons/Anaajibicho
MotorCity is Union Properties' flagship development. It includes the Dubai Autodrome, completed in 2004
  • The developer of Dubai’s MotorCity has repaid $60.7m to lenders
  • Deal follows a turbulent year for the company, after fraud allegations
  • Union Properties’ new board launched a turnaround strategy in Q1

Union Properties, one of Dubai’s oldest developers, has completed a $162 million debt restructuring, including a $60.7m repayment to lenders, it said on Tuesday.

The move is part of a comprehensive restructuring that follows a turbulent year for the company. In October 2021, the Securities and Commodities Authority, the UAE’s markets regulator, accused senior executives at Union Properties of forgery, abuse of authority, fraud and damage to the interests of the company.

An investigation was launched and, in November, prosecutors ordered the detention of the developer’s then chairman.

Union Properties appointed a new board in December and launched a turnaround strategy in the first quarter of 2022.

In March, the company unveiled its debt plan, adding that it was planning legal action to recover $42m allegedly “misappropriated” by the former executives. They have not commented on the claims.

On Tuesday, the developer said in a filing to Dubai Financial Market that the restructuring, which is expected to reduce financing costs, would provide “significantly improved profitability and cash flow generation”.

Its announcement came as the Dubai real estate sector recorded strong growth in the third quarter of 2022, according to a JLL report.

Union Properties, which was founded in 1987 and built the MotorCity development, said its strengthened balance sheet “unlocks its ability to raise additional financing for future real estate developments whilst also enabling the company to consider new value creation opportunities”.

Amer Khansaheb, its managing director, described the debt restructuring as an “important milestone” that placed the company “on a firm foundation to drive future growth and value creation for our shareholders”. 

He added: “The strong performance and outlook for the UAE’s real estate market provides significant opportunities for Union Properties, including the potential for new real estate developments.”

The developer made a net loss of $263m in 2021 but reported a net profit of $77,600 in the three months to the end of June.

The JLL report published on Tuesday said average residential prices in Dubai grew 9 percent year-on-year in the third quarter, while average rental rates increased by 25 percent year-on-year.

Across the UAE, price growth is being fuelled by investor and end-user demand. Off-plan sales are high, while secondary market sales are also improving, in light of increasing yields, according to Khawar Khan, head of research for the Middle East, Africa and Turkey at JLL.

Latest articles

The new East Africa cloud service will give customers access to secure, high-speed cloud and AI services across the region

G42 and Microsoft to invest $1bn in Kenya data centre

Abu Dhabi-based artificial intelligence (AI) company G42 has partnered with US tech giant Microsoft to invest $1 billion in a green data centre in Kenya. The data centre, which will be built by G42 and its partners, will provide access to Azure – a computing platform developed by Microsoft – through a new East Africa cloud region. […]

Turkish Airlines flew 18.5 million passengers from January to March 2024, up 8.4 percent annually

Turkish Airlines revenue rises 10% to nearly $5bn

Revenue at Turkey’s national carrier Turkish Airlines rose 10 percent year on year in the first quarter of 2024 to $4.8 billion, driven by growing passenger numbers. Turkish Airlines flew 18.5 million passengers from January to March, up 8.4 percent annually, it said in its latest investor presentation. Passenger revenue climbed 5 percent year on year […]

The Adnoc Drilling head office. Adnoc will not be able to sell any more of its stake for at least six months

Adnoc Drilling successfully floats further stake

Abu Dhabi state oil company Adnoc has successfully placed a further 5.5 percent of listed subsidiary Adnoc Drilling, increasing the company’s free float to 16.5 percent. The sale of an additional 880 million shares through a book-building process will boost trading of Adnoc Drilling’s stock on Abu Dhabi’s bourse. Adnoc restricted the share sale to […]

John Kirby, the White House national security communications adviser, said Saudi Arabia and the US were 'closer than we’ve ever been' to a deal

Saudi Arabia ‘close’ to US defence pact and arms deal

Saudi Arabia could be close to a security pact with the United States that would enable the kingdom to buy arms, potentially including the sought-after F-35 fighter jet, and obtain some form of US defence guarantee, White House officials said this week.  John Kirby, the president’s national security spokesperson, said on May 20 that the […]