Dubai developer says it is at final stages of the deal and will announce the buyer in the coming days
Union Properties to sell entire stake in district cooling firm Emicool
Dubai real estate developer Union Properties is in the final stages of a deal to sell its entire stake in district cooling company Emicool, as it looks to generate additional revenues and expand into new markets.
The company has received several offers for its shareholding in Emicool from UAE firms, it said in a statement on Wednesday to the Dubai Financial Market, where its shares are traded. Union Properties is finalising the necessary legal formalities, and will be announcing the buyer in the coming days, it said without identifying the potential buyer or the financial details of the deal.
Emicool, which provides chilled water for residential, commercial and industrial air conditioning systems around Dubai is a joint venture with Dubai Investments. Union Properties' share of net assets in the company was valued at Dh355 million, according to the annual report.
“The sale of Union Properties’ stake in Emicool is another important milestone for us, and will contribute to our new strategy to enhance our investments, diversify our revenue streams, expand our business, and venture into new markets,” Ahmed Khouri, the group chief executive of Union Properties said. “At a time when Union Properties is undergoing a new phase of growth, this move further strengthens our focus on core operations, and tapping into new sectors.”
Union Properties, which restructured its board in May, has struggled to maintain profitability amid sliding real estate prices in the UAE. It is looking to diversify income streams, expand its footprint outside its home market and enter new business lines.
The developer, in the second quarter of 2017, posted its biggest-ever quarterly loss of Dh2.3 billion after a Dh2.8bn write-down of asset value by its new management team. It also reported a Dh45m loss in the third quarter of last year.
The company in December said it will sell shares in its facilities management unit through an initial public offering in the second half of 2018. Union Properties will float 100 per cent of ServeU by listing the unit on the Dubai index and will use the proceeds from the sale to boost its investment portfolio and operations, it said at the time.
The developer is launching new projects to expand its portfolio of properties, with a focus on assets that could generate recurring revenues. The company has set up Union Malls to provide retail and leisure options at its developments and launched its inaugural mall in Motor City in 2017. It also established Al Etihad Hotel Management, a wholly-owned unit to develop and manage luxury hotels and furnished residences in Dubai, and also launched an investment arm, UPP Capital Investment, that will focus on direct and indirect property investments.
The company, which already has three hotels under development in its flagship master development Motor City, plans to extend hospitality and facilities management services for around 3,000 serviced apartments and 3,500 hotel rooms and later expand the scope of business to other developments in Dubai.