Union Properties registers accumulated losses of $533.4mn in 2020
Developer says loss is due to a fair value loss of $563.5m related in investment properties recorded in 2017, as well as the general decline of the UAE real estate sector
Union Properties, the Dubai-based real estate developer, has said that it has registered accumulated losses of $533.4 million in 2020, representing about 45.7% of its capital.
The loss was mainly due to a fair value loss of $563.5 million related to investment properties recorded in the fiscal year 2017 ((correction of gross floor area and decline in the fair value of real estate portfolio) and the general decline of the real estate sector in the UAE, said Union Properties in a filing to the Dubai Financial Market.
It added that a host of other factors also contributed to the loss such as impairment of $136.9 million recorded on the fiscal year 2017 and material adverse impact of the Covid-19 pandemic on the overall UAE economy and consequently on the activities of the group.
In order to tackle the accumulated losses, Union Properties said that it will soon restructure its debt, recover the outstanding receivables, and cut operating costs, in addition to developing an extensive landbank and improving assets with recurring cash flow.
The loss was predominantly due to variations in the valuations of its real estate portfolio, the developer asserted, pointing out that these accumulated losses could potentially be recouped in the event of an increase in the prices of lands in Dubai.
In the meanwhile, the company said that it will continue to focus on its operating subsidiaries through a potential listing of certain subsidiaries and other cash-generating activities.
