A unit of Dubai Holding, owned by the emirate’s ruler, has sold a piece of land to fast-growing shopping mall developer Majid Al Futtaim (MAF), the latest in a series of plot sales initiated by state-linked firms in the emirate to raise funds.
The unit, TECOM Investments, sold 1 million square feet of land at its International Media Production Zone (IMPZ), a development that spreads across 43 million square feet.
“Majid Al Futtaim intends to use the land to develop a community shopping mall as part of the company’s 3 billion dirham ($816 million) investment plan for Dubai,” a spokesman at MAF Properties said in a statement.
TECOM also confirmed the sale but both firms declined to give a value for the deal.
Privately owned MAF, builder of the famous indoor ski-slope at its flagship Mall of the Emirates, said earlier this week that it would invest another 3 billion dirhams over the next five years in Dubai.
TECOM is a unit of Dubai Holding Commercial Operations Group (DHCOG), the flagship company in the ruler of Dubai’s business empire, Dubai Holding.
DHCOG was hit hard by Dubai’s property market crash and corporate debt troubles of 2008-2010, but the local economy has been recovering since then and the company’s 2012 profit surged to 1.2 billion dirhams from 204 million dirhams in 2011.
The company posted 2.9 billion dirhams of revenues from property and land sales in 2012, out of total revenues of 9.2 billion dirhams, its financial statement shows.
Land sales have become a key part of revenue generation for Dubai’s state-linked property developers, who in the past year have announced new projects and revived stalled ones to take advantage of renewed optimism in the real estate market, after its collapse in the 2009 debt crisis.
Dubai government firms own a large share of land assets in the emirate, but needs funds to build on these areas.
Nakheel, another state-owned flagship firm, sold several land plots last year including a $44 million property in its Al Furjan and Jumeirah Village Triangle developments.
Home prices in Dubai rose over 20 percent last year as investors returned to the property market amid the emirate’s trade and tourism boom.-Reuters