Page 19 - UNION PROPERTIES PR REPORT - March 2024

3/25/24, 11:12 AM Analysis: Shares of Union Properties are rallying after a long lull, but real test in 2 years

A DFM disclosure last month showed the settlement issue was not over, as the subjects had failed to
pay, and, the company had been unable to possess and sell real-estate assets as agreed.

A director’s report published with financial results last week nonetheless cited a “robust foundation

and strategic vision”, saying the company is well positioned to play a significant role in Dubai’s real-
estate sector.

However, auditors Grant Thornton drew attention to accumulated losses of AED 2.1 billion and
liabilities exceeding assets by AED 263 million.

Operating profit reached AED 101 million, up from AED 10 million in 2022, but borrowing costs rose to
AED 114 million from AED 74.8 million in 2022 as rising interest rates in 2023 took a bite from the
company’s comprehensive income, which rose to AED 837.6 million in 2023, up from AED 29.98
million.

However, with the Federal Reserve expected to impose three rate cuts this year, and GCC banks

likely to follow suit, interest rates are likely to fall, easing borrowing costs, said Lakhwani.

Leaders in Dubai real estate

Major developers including Dubai Financial Market–listed Emaar as well as Damac and Nakheel,
which has announced a merger with Meydan, are among those that continue to deliver residential
communities, and new developers have entered the market since the COVID-19 pandemic, said one

analyst.

According to Lakhwani, UAE real estate is working “on a different level”, with prices rising, while other
countries have seen them stagnate or fall.

A Dubai residential market review by Knight Frank at the end of last year said Dubai was a market
once hindered by oversupply, but there are 13,000 homes to be delivered per year over the next six

years, which the review regarded as “undersupply” against projected population growth.

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