DIFC Investments, the investment arm of Dubai International Financial Centre (DIFC), reported a loss of AED2.1bn ($562m) for 2009 due to writedowns related to the group’s real estate and business investments.

DIFC Investments wrote down the value of its investment properties by AED1.6bn in 2009 compared with a gain of AED4.59bn in the previous year, according to results posted on Nasdaq Dubai on 2 May.

The company set aside AED313.3m to cover for losses from investments in joint ventures and also booked a AED302m loss after deciding to sell its stake in Villa Moda Lifestyle, a luxury readymade garments and accessories company. It bought 60.4 per cent of Villa Moda in 2008.

It also posted a restated profit of AED3bn in 2008 and said it had received a government loan of AED1.8bn in 2008, and a second one of the same value in 2009.

Ahmed al-Tayer, chairman of DIFC Investments and governor of the DIFC Authority, which regulates the DIFC, blamed the loss on the prolonged economic downturn and warned that market conditions would remain tough.

“We expect the market environment to remain volatile and challenging throughout 2010,” said Al-Tayer.

DIFC Investment’s stake in Borse Dubai, the holding company for the emirate’s two exchanges Dubai Financial Market (DFM) and Nasdaq Dubai, has been decreased to 10.29 per cent from 20 per cent, according to its financial statement.

DIFC Investments has listed a AED4.59bn Islamic bond on Nasdaq Dubai, which matures in 2012. Al-Tayer said the firm would consider divesting assets to cope with difficult market conditions going forward.