The property developer Limitless hopes to conclude a US$1.2 billion (Dh4.4bn) debt deal with creditors by the end of the month.
The developer, which is owned by the Dubai World conglomerate, was hard hit by the 2008 property crash but was not part of the subsequent $24.9bn debt restructuring of its parent company.
"Discussions continue and we aim to conclude the deal by the end of September," the company said yesterday. Limitless is one of several Dubai Government-backed developers that racked up huge debts in the wake of the global financial crisis.
It was behind some of the emirate's most lavish plans - including the 75km Arabian Canal intended to encompass the city and create the opportunity for developing more waterfront projects.
Other government-related companies are also in discussions with creditor banks to renegotiate the terms of loans taken out during the boom years but which have since proved difficult to repay. Ownership of Limitless is expected to transfer from Dubai World to the emirate's Government once the company concludes a deal with lenders.
Some Dubai developers have restarted mothballed construction projects amid tentative signs of recovery in some parts of the market. Despite a huge oversupply of completed homes, prices continue to recover in prime locations, according to data from brokerages.
Jones Lang LaSalle estimates 3,000 units were completed in the emirate in the second quarter, with as many as 24,000 more due in the second half of this year. However, villa prices in prime locations have risen by more than 21 per cent over the past year, with rents up about 10 per cent in the same period.
Limitless is developing Downtown Jebel Ali, which includes The Galleries office and retail-based development located on the main highway between Dubai and Abu Dhabi.