Union Properties Reduce Legacy Debt to $156.55 Million

Dubai-based Union Properties on Wednesday said that it has achieved a significant milestone in its recovery plan as it reduced its legacy debt of $400 million (FY2022) to $156.55 million at the end December 2024, and further reduce the debt by another $40.84 by the end of next month.

On the back of this exceptional performance, Union Properties was able to reduce the margin on the 3M EIBOR from 3.25% to 2.75%, in light of growing trust among banks. It also secured additional bank loans of $40.84 million to fund new investments it intends to make in the coming 18 months.

The company, which trades on the Dubai Financial Market (DFM), informed the bourse this morning, the company said that these investments are expected to generate an annual recurring income of approximately $10.89 million.

By successfully implementing its debt restructuring strategy, Union Properties has lowered its financing costs by $22.33 million during FY 2024 – from $31.04 million in FY 2023 to $8.71 million in FY 2024, improving profitability, and liquidity.

In addition, as a part of its asset divestment strategy, the company has sold plots, generating $350 million in funds for debt settlement agreements and fulfilling preliminary costs for new real estate projects.

It may be recalled that as part of five-year strategy plan, the company will be retaining land of approximately 10 million sq. ft. of Gross Floor Area (GFA) from its current portfolio for development. This exceptional milestone is a testament to its strong asset base and strategic commitment towards driving sustainable growth in the UAE’s real estate sector.

Two New Projects

As part of its growth strategy, the company also revealed plans to launch two new projects soon, further reinforcing its leading position in Dubai’s urban development landscape. These projects will include mixed-use, residential, commercial developments that will meet the highest benchmarks of sustainability, innovation and functionality.

Set to be launched soon, the two new projects will be strategically located and built to the highest sustainability and quality standards. These projects demonstrate Union Properties’ commitment to promoting sustainable growth and improving Dubai’s Real Estate market by attempting to meet the changing needs.

Union Properties CEO Amer Khansaheb said that with the successful reduction of the legacy debt and acquisition of new funding to advance the company’s strategic expansion, Union Properties has paved the way in a new era of growth and possibilities.

Our growing trust among financial institutions and unwavering commitment to excellence will certainly lay the groundwork for continued success, while also allowing us to address the evolving needs of urban populations. The strength and potential of the Company’s portfolio are also demonstrated in different format by the availability of 10 million sq. ft. of GFA, he added.