Dubai's Union Properties in JV talks with government

By Jason Benham

DUBAI (Reuters) - Dubai-listed Union Properties UPRO.DU is in talks with the government over a joint venture to be announced soon and plans to double its land holdings in Dubai over the next two years.

Chief Financial Officer Zaid Ghoul told the Reuters Global Real Estate Summit that the company expects to make a profit of up to 800 million dirhams this year, and more than 3 billion dirhams in 2009 as its projects come on line.

The developer, which is 48 percent owned by Emirates NBD ENBD.DU unit Emirates Bank International, made a profit of 684 million dirhams in 2007.

"We are fine with the joint venture...it adds value because we are venturing with a government entity," he said. Ghoul declined to give details about the deal, but said "we are close...it will be soon."

The company which currently has 55 million square feet of land, plans to add 40-60 million square feet to its land bank.

Ghoul said the company is looking to borrow 4 billion dirhams in 3- to 5-year financing, and was in talks with local and international banks.

He said that Union Properties will borrow at least 2.5 billion dirhams this year and an additional 1.5 billion dirhams either this year or next depending on banks' recommendations.

Asked about whether it would consider Islamic bonds, Ghoul said it was open to both conventional and Islamic borrowing options.

Union Properties could seek a credit rating from 2010 by which time it will have 1 billion dirhams a year in profits from a stream of recurring businesses excluding real estate sales.

Ghoul said the company is looking to develop its leisure projects in Oman and was also looking at Mauritius.

(Reporting by Jason Benham; Editing by Jason Neely)