DIB finances Union Properties to strengthen its balance sheet

41 days to go Tuesday 5th August 2014 DIB finances Union Properties to strengthen its balance sheet Daily Cover UAE: Dubai Islamic Bank (DIB), the largest Shariah compliant financial institution in the UAE, has afforded a AED360 million (US$97.99 million) re-financing facility to one of UAE’s leading property investment developer, Union Properties (UP). The facility seeks to assist UP to effectively manage its balance sheet and to enhance focus on core business and expansion plans as the developer looks to capitalize on the opportunities currently available in the real estate market. Emerging strongly from the financial crisis, the developer is moving forward with its growth plans after having repaid AED7 billion (US$1.9 billion)-worth of legacy bank debt. Commenting on the transaction Dr Adnan Chilwan, CEO of DIB, said: “The real estate sector in the UAE has rebounded strongly on the back of the economy's core fundamentals. The current and planned infrastructure of Dubai and the UAE positions the country among the most attractive markets in the world for business growth and prosperity. With key regulations in place and optimum enforcement of the same by relevant authorities, the industry is now on a solid and sustainable growth path.” Naveed Ali, the chief of corporate banking at DIB, further highlighted that the bank’s arrangement with UP is another favorable addition to the DIB’s finance book. “It is part of our strategy of strengthening our balance sheet by selectively conducting business with major players in the commercial real estate market. Given UP's strong financial performance this year, the repayment of all previous debt, as well as the growth in the real estate sector, we believe this deal to be another successful step in establishing a sustainable trend in the real estate sector,” he expounded. According to Dubai's Real Estate Regulatory Agency, real estate transactions in the UAE have grown at a rapid pace since the year 2012, with the volume of deals in Dubai (excluding re-mortgages and donations) increasing by approximately 50% over the past year. S&P has also projected that prices in the particular sector will continue to remain stable, backed by the strong macroeconomic growth in the UAE. 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