Union Properties reduces legacy debt, targets another $40.8mln cut by Q1-25
Dubai: Union Properties has achieved a significant milestone in its recovery plan by reducing its legacy debt of AED 1.47 billion as of 2022 to AED 575 million as of the end of December 2024.
The company also plans for an additional reduction of AED 150 million by the end of the first quarter (Q1) of 2025, according to a press release.
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.
The company was also able to secure additional bank loans of AED 150 million to fund new investments it intends to make in the coming 18 months. These investments are expected to generate an annual recurring income of approximately AED 40 million.
Furthermore, Union Properties has lowered its financing costs by AED 82 million throughout 2024 to hit AED 32 million at the end of the year from AED 114 million in 2023 by implementing its debt restructuring strategy, improving profitability and liquidity.
In addition, as a part of its asset divestment strategy, the company has sold plots, generating AED 1.30 billion in funds for debt settlement agreements and fulfilling preliminary costs for new real estate projects.
Union Properties plans to launch two new projects soon, further reinforcing its leading position in Dubai's urban development landscape. The projects will include mixed-use, residential, commercial developments that will meet the highest benchmarks of sustainability, innovation and functionality.
CEO and Board Member of Union Properties, Amer Khansaheb, said: 'With the successful reduction of our legacy debt and acquisition of new funding to advance our strategic expansion, we at Union Properties pave the way in a new era of growth and possibilities.'
Khansaheb added: '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.'
He concluded: 'The strength and potential of the Company's portfolio are also demonstrated in different format by the availability of 10 million square feet of GFA."
Meanwhile, the two new projects are set to be launched soon and 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.
It is worth mentioning that the real estate firm sold above AED 1.30 billion worth of plots since the announcement of its five-year turnaround strategy in April 2023.
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