Dubai’s Emaar Properties is evaluating various financing options including asset sales, as the developer looks to simplify its business and achieve higher value.
Emaar, the biggest UAE developer by market capitalisation, "is continuously exploring various financing options as part of its strategy to streamline its business and generate value," the company said in a statement to the Dubai Financial Market, where its shares trade. The company added it will announce details of such opportunities as and when they are finalised.
Emaar's statement is in response to a Reuters report this week, which said the developer is close to selling its district cooling business to the Dubai-listed National Central Cooling Company (Tabreed). The report said HSBC is advising Tabreed on the purchase, while lenders including Standard Chartered are working with Emaar on the deal.
In its bourse filing on Thursday, Emaar did not confirm or deny the potential deal. In a separate statement to the DFM, Tabreed said it is "continuously exploring acquisition opportunities in the region as part of its overall growth strategy".
District cooling companies deliver chilled water through insulated pipes to cool offices, industrial and residential buildings. Emaar’s district cooling business, which operates in the UAE, was established in 2004, according to the report.
Emaar’s primary focus is on real estate, retail and hospitality sectors. The developer behind the Burj Khalifa, the tallest building in the world, has sought to divest some of its non-core assets as it looks to pursue growth and remain asset-light amid difficult market conditions.
The developer in February last year, completed a Dh2.2 billion deal to sell five of its hotels, including the flagship Address Dubai Mall and Address Boulevard, to Abu Dhabi National Hotels. The proceeds of the deal will be used to finance commercial properties that generate a higher return on investment, the company said in a December 2018 bourse filing.
Tabreed operates 79 district cooling plants located throughout the region, and delivers more than 1.16 million refrigeration tonnes to key developments such as Sheikh Zayed Grand Mosque, the Dubai Metro, Ferrari World Abu Dhabi, Yas Water Park, Abu Dhabi’s Al Maryah Island, Bahrain Financial Market and the Jabal Omar Development in Saudi Arabia.