Union Properties to raise Dh4bn debt

Union Properties (UP) is looking to raise Dh4 billion in debt of which Dh2.5 billion will be raised by the end of the year and Dh1.5bn by early next year, a top company executive said.

"We are in talks with local and international banks for raising long-term debt to finance our projects," Union Properties' Chief Financial Officer Zaid Ghoul told Emirates Business.

"We may raise the loan through conventional or Islamic instruments. Everything is acceptable to us. We will soon start selling office space in the Index tower, which will provide us with more cash."

Index is an 80-storey multi-purpose tower with 25 floors of office space and 40 floors of apartments in the Dubai International Financial Centre (DIFC). Seven floors are dedicated for penthouses and three for retail outlets.

The DIFC is reportedly the most expensive area closely followed by the rest of Sheikh Zayed Road. Rents in the financial district are set to be second only to the West End of London, Jones Lang LaSalle said in a recent report. According to Ghoul, the company is working on increasing its rental portfolio. "We will be building the retail area in Motor City, which we will be retaining for rental income," he said.

As on December 2007, the firm had a rental portfolio of Dh2bn, with rental revenues of Dh180 million to Dh200m per year, its balance sheet showed.

Emirates Business had reported earlier Union Properties is in talks with government and private institutions to buy between 40 and 60 million square feet of land, and plans to use it to construct and deliver new projects in 2011.

"We are looking at downtown Dubai, Bawadi, Dubailand and Mirdiff," Ghoul had said.