Union Properties close to Ritz Carlton sale deal

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Dubai’s Union Properties is close to sealing a deal over the sale of its Ritz Carlton hotel and has also received an offer from an investor to take a major stake in its subsidiary, Emirates District Cooling (Emicool).

Chairman Khalid bin Kalban told Bahrain’s Gulf Daily News that the company, which had put the hotel on the market for AED1.6bn, had received two offers for the hotel in the Dubai International Financial Centre – one from Saudi Arabia and one from within the UAE.

“Now we have two offers very close to our target price,” he said, adding “We expect to announce the sale at the end of the month.”

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He wouldn't comment on the details of the deal.

Bin Kalban also told the paper that the company had received interest from an investor in taking a majority share in Emicool. Emicool is a joint-ventre between Union Properties and M'Sharie, a subsidiary of Dubai Investments PJSC – and each company owns a 50% stake in the district cooling service provider.

Any decision over Union Properties’ stake in Emicool would be subject to board approval, Bin Kalban said.

Bin Kalban earlier in the year said that Union Properties had “got distracted” during the height of the property boom by “getting involved in so many businesses that were not core”. That distraction led to an AED6.8bn debt and the suspension of work on several projects, including the F1-X Formula One theme park at Motor City.

“MotorCity was created around the concept of having a superior race arena and many people would question the wisdom of getting involved in that,” Bin Kalban said. “The company got involved and it wasn’t a core business.”

Union Properties posted AED50 million net profits for the first quarter of this year, a 66% gain on the AED30.13 million reported in the equivalent period in 2009 that smashed analysts forecasts - as reported by CW. Revenues hit AED846 million dirhams, a 48% increase over the AED572 million from a year previously.