Dubai developer Union Properties has signed a AED 360 million ($98 million) re-financing facility it was announced on Monday.
Although Union Properties is part-owned by Emirates NBD, Dubai's largest lender, the agreement was signed with Dubai Islamic Bank and will help the developer push ahead with its pipeline of projects.
Commenting on the agreement, Dr. Adnan Chilwan, CEO of Dubai Islamic Bank said: “The real estate sector in the UAE has rebounded strongly on the back of the economy’s core fundamentals. The current and planned infrastructure of Dubai and the UAE positions the country amongst the most attractive markets in the world for business growth and prosperity.
Union Properties General Manager Ahmed Al Marri said: “Over the past few years, Union Properties has focused on strengthening its capital position by investing in its core fundamentals and repaying its legacy debt. As we have now successfully completed all these payments, we are well placed to move forward with our new growth strategy that is backed by our positive financial performances. As a result, we are proud to partner with the leading Islamic bank in the country, and this new financing arrangement with DIB represents a fresh start for the company.”
Union Properties expects its profit in the first half of this year to soar to AED700 million, the developer said in a bourse statement last month.
That would mean a jump of 418 percent from the corresponding period of 2013 when the company earned AED135.2m.
Union Properties' first quarter net profit was AED179.79m, up from AED21.91m in the same period last year.
In its 2013 annual report, Emirates NBD confirmed it had sold 32.6 percent of its stake in Union Properties, resulting in a decrease in the lender’s shareholding from 47.6 percent as at 31 December 2012 to 15 percent.
In October last year, Emirates NBD classified its remaining stake in Union Properties as "available for sale" while in January this year it was reported that Dubai Investments was interested in buying the lender’s stake in the property developer.