- UAE-based developer Union Properties announces 84 per cent year on year fall in quarterly profits
- Quarter one profits were just AED28m ($7.6m)
- The news follows reports of a slowing real estate market in Dubai
Dubai-based developer Union Properties announced profits for the first quarter of 2015 of just AED28m ($7.6m).
This represents an 84 per cent drop from the first quarter of 2014, when it posted a profit of AED180m.
Its share price fell 9.7 per cent on 11 May as a response. This was the second-largest loss as the Dubai Financial Market (DFM) fell by 1.8 per cent overall.
Union Properties profits also fell by 45 per cent in 2014 to AED865m.
The developer obtained a AED360m refinancing facility with Dubai Islamic Bank in mid-2014.
The financing was to support the companys new growth strategy. However, Dubais real estate market slowed in early 2015 due to the perception that falling oil prices, a stronger dollar and the weakening of the euro and rouble would affect capital inflow from abroad. Internally, the market has also been affected by new regulations and concerns surrounding supply and demand fundamentals.
The firm spent years repaying AED7bn-worth of debt accrued during the financial crisis and collapse of Dubais real estate sector in 2008-09.