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Motor City developer Union Properties has reached settlement agreements with Dubailand and Emirates NBD to settle its debt and repurpose some of its Motor City land for new projects.
#1- The developer secured a no-objection certificate from Dubailand, granting it the right to repurpose its land in Motor City in exchange for a payment of AED 400 mn paid in installments over three years, according to a DFM disclosure (pdf). The developer will now apply for a change of usage permit from the zoning authority to develop additional residential zones and expand its gross floor area in the city, the developer said.
Making use of the long-deserted F1 park land: Union Properties had plans to develop a USD 460 mn Formula One racing theme park, but scrapped the plan in 2009. It later had plans to revive the project in 2016, but a string of losses and legal disputes, as well as a deluge of park developments across Dubai, stalled the project.
SOUND SMART- A no-objection certificate is a bureaucratic greenlight that allows companies and developers to move forward with projects on the terms they have communicated.
Refresher: Union Properties had filed a real estate claim against Dubailand in April, claiming that the developer declined to issue NOCs for the developer’s projects in Motor City without any contractual basis, Gulf News previously reported.
#2- The developer also reached a debt settlement agreement with Emirates NBD that will see it pay AED 850 mn within nine months of signing the agreement,the disclosure adds. The company was in talks with Emirates NBD in March to restructure its debt, after it turned to the black in 2022, compared with AED 966 mn in losses in 2021.It later said in December (pdf) that it plans to pay a “national bank” somewhere between AED 825-875 mn over nine months.
Background: Union Properties is among several real estate developers still sifting through the aftermath of the 2009 property market correction in Dubai. The company has owed Emirates NBD USD 2 bn in debt repayments for years, and has since closed a USD 257.5 mn debt restructuring agreement back in August 2020.
