Union Properties nets loans for stalled MotorCity hotel projects

Dubai-based developer sees full-year net loss swell to $430m on provisions
Union Properties nets loans for stalled MotorCity hotel projects
Union Properties halted work on two hotels in Dubais MotorCity after the emirates property crash
By Bloomberg
Thu 02 Feb 2012 03:24 PM

Union Properties fell the most in 11 months after the
Dubai-based developer said its full-year loss widened as the company booked
provisions.

The shares declined as much as 9.2 percent. The net loss
swelled to AED1.57bn ($430m) from AED1.53bn a year earlier, the Dubai-based
company said in a statement today.

Revenue climbed to AED4.92bn from AED2.87bn.

Demand for real estate in Dubai has failed to recover from a
slump that caused residential property prices to drop more than 65 percent from
a mid-2008 peak as banks curtailed mortgage lending and speculative buyers fled
the market. Developers cut hundreds of jobs and put projects on hold.

Union Properties secured a loan of AED400m from Emirates NBD,
a bank based in the emirate, to complete two stalled hotel projects in its
MotorCity development, Chairman Khalid bin Kalban said in an interview Thursday.

The developer will soon tender a contract to finish the
Renaissance hotel and the Marriott Courtyard, which are about 70 percent
complete, Bin Kalban said.

The company’s fourth-quarter loss narrowed to AED68.2m from AED778m
a year earlier, according to Bloomberg calculations based on the full-year
figures.

Union Properties rescheduled AED2.7bn of debt owed to
Emirates NBD until 2017, bin Kalban said on Jan 18. It also settled AED1.1bn in
debt to Emirates NBD in exchange for homes and offices in projects including
Limestone and The Index towers, he said at the time.

Total assets declined to AED9.1bn at the end of last year
from AED14.9bn a year earlier.

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