Eshraq sells major Jumeirah Village residential plots to Danube
DUBAI, October 6, 2022
UAE-based Eshraq Investments said it has entered into a sale and purchase agreement with Dubai developer Danube Properties for the sale of two land plots in Jumeirah Village Circle (JVC) for a purchase price of AED33.1 million ($9 million).
The transaction is agreed at Eshraq’s book value and reflects the potential for unlocking the land bank to unlock shareholder value, said the company in a statement.
On the strategic sales deal, Eshraq said this highlights the progress of its land monetisation programme, which sets forth a plan to fully monetize its land bank over the next three years - through the sale or introduction of partners to develop the land bank and its subsequent sale.
As per the agreement, Danube will be using the land plots in JVC for a residential project to be developed over a four-year period.
In addition to the initial purchase price, the agreement also provides for an annual profit and an earnout mechanism payable to Eshraq tied to the projects’ profits, said the company in its statement.
Eshraq also announced that it is in discussions with other parties for sale or joint venture agreements for other plots and will make appropriate disclosures upon conclusion of those discussions, it added.
Chairman Jassim Alseddiqi said: "This transaction at the plots’ book value reflects the arbitrage in the company’s share price, which remains at a steep discount to Eshraq’s book value."
"We are committed to achieve the land monetization program that will improve Eshraq’s profitability over the coming quarters," he noted.
Founder and Chairman Rizwan Sajan said: "Danube Group is pleased to partner with Eshraq in acquiring two land plots at JVC for the development of properties in the coming months. Due to the high demand for affordable luxury homes, we are now looking to develop more properties."
"Our partnership with Eshraq comes at the right time and at the right master community – JVC which is at the heart of the new Dubai," he added.-TradeArabia News Service
