Union Properties Witness Robust Asset Sales in Q1 of 2024

Dubai-based Union Properties on Monday said that it has demonstrated robust asset sales and cash flow generation during the first quarter of 2024 and has closed $222.20 million plot sales and utilised the proceeds to repay $78.97 million to its lenders.

The Company is also poised to repay an additional $68.08 million in the second quarter of 2024, marking a significant milestone in its debt restructuring plan agreed with local banks, the company said in a disclosure to Dubai Financial Market (DFM), where its shares are traded.

This achievement is a significant moment in Union Properties’ turnaround strategy, initiated during the first quarter of 2022 and further solidified in the last quarter of 2023. The restructuring is not only reducing financing costs but is also deleveraging Union Properties’ balance sheet for improved profitability and enhanced cash flow generation.

With a strengthened balance sheet, the company is poised to pursue additional financing for future Real Estate developments and explore new value creation opportunities.

As part of its commitment to minimising the accumulated losses, the company and its subsidiaries have intensified efforts to restructure the outstanding debt and reduce the finance cost. This includes a strategic asset divestment strategy, initially presented to shareholders in FY 2022 as part of a comprehensive recovery plan.

These proceeds furnish the necessary funds to fulfil debt settlement agreements and honour the agreement reached with “Dubai Land” in 2023, which now allows Union Properties to change the original land usage and reallocate the GFA, thereby unlocking the full potential of its land bank in alignment with market demand.

This strategic move positions the company to leverage development opportunities on these key properties over the next five years, Union Properties said.

Turnaround Strategy Successful

Amer Khansaheb, Board Member and Managing Director of Union Properties, said that they have witnessed significant improvement on the demand for company-owned plots in Motor City, leading to increased cash flow during the first quarter of 2024 reflecting the successful implementation of the company’s turnaround strategy.

He said that with a bolstered balance sheet and improved free cash flows, Union Properties was now in a strong position to leverage its deep expertise, reputation, and highly sought-after land bank locations to pursue strategic growth opportunities and expand its market presence with confidence and agility.

This milestone also marks a significant achievement after the successful conclusion of our debt restructuring, laying a sturdy foundation for propelling growth and enriching shareholder value, he said.

“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 in the near future” Khansaheb added.