Dubai real estate: Union Properties reduces legacy debt and secures new funding

Union Properties' road to recovery reached a new milestone in Dubai when it announced that its legacy debt has reduced to AED575m ($156.5m) as of the end of December 2024, nearly 60 per cent down from AED1.47bn ($400m) in Financial Year 2022.
The Dubai-based real estate company is targeting a further reduction to AED150m ($40.85m) by the end of first quarter of 2025.
The growing trust among the banks has helped the company reduce the margin on the 3M EIBOR from 3.25 per cent to 2.75 per cent, and it was also able to secure additional bank loans of AED150m ($40.85m) to fund new investments.
Dubai's Union Properties debt
These investments, which Union Properties intends to make over the next 18 months, are expected to generate an annual recurring income of approximately AED40m ($10.9m).
Union Properties had earlier announced that as part of its 5-year strategy, it will be retaining land of approximately 10 million sqf. of Gross Floor Area (GFA) from its current portfolio for development.
Amer Khansaheb, Chief Executive Officer and Board Member, Union Properties, commented: 'With the successful reduction of our legacy debt and acquisition of new funding to advance our strategic expansion, Union Properties has paved the way for a new era of growth and possibilities.
'Our growing trust among financial institutions and unwavering commitment to excellence will 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 sqft of GFA.'
With the successful implementation of its debt restructuring strategy, Union Properties has lowered its financing costs by AED82m ($22.2m) during FY2024, bringing it down to AED32m ($8.7m) in FY 2024 from AED114m ($31m) in FY 2023. This has led to improving profitability and liquidity.
As part of its asset divestment strategy, the Dubai real estate company has sold plots and generated AED1.3bn ($350m) in funds for debt settlement agreements and fulfil preliminary costs for new real estate projects.
Two new projects
As part of its growth strategy, Union Properties revealed plans to launch two new Dubai projects soon. These will include mixed-use, residential, and 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. These projects demonstrate Union Properties' commitment to promoting sustainable growth and improving Dubai's real estate market by attempting to meet the changing needs.

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