Deyaar hopes to close debt fund by year-end

Deyaar expects to close a Dh500 million ($136.2m) distressed debt fund by the year-end, said the chief executive yesterday.

"We will begin fund raising in the next two weeks," said Markus Giebel.

Asked when the fund would close, Giebel said the end of the year would be about right.

Deyaar is setting up the fund with Dubai Islamic Bank, which owns a 42 per cent stake in the developer, to buy distressed debt, including its own, as it looks to boost returns for shareholders. Real estate prices in Dubai have slumped since the financial crisis brought to an end a regional economic boom late last year.

Deyaar and Dubai Islamic Bank have already put Dh200m into the fund.

Deyaar plans to rent out the units to provide cash flow for the company before selling them once the Dubai property market recovers.

Keep up with the latest business news from the region with the daily Emirates Business 24|7 newsletter. To subscribe to the newsletter, please click here.