Abu Dhabi, UAE; 06 October 2022: Eshraq Investments PJSC (“Eshraq” or “Company”) announced today that the Company has entered into a Sale and Purchase Agreement (“Agreement”) with Danube Properties for the sale of two land plots in Jumeirah Village Circle (JVC) in Dubai for a purchase price of AED 33.1mn. The transaction is agreed at Eshraq’s book value and reflects the potential for unlocking the land bank to unlock shareholder value.
Danube Properties, the property development arm of Danube Group, is rated amongst top 5 developers in the UAE. Danube has developed 17 projects in Dubai (including 13 delivered so far) and are renowned for on time delivery of exceptional quality assets with record sales success.
The Agreement with Danube Properties highlights the progress of Eshraq’s land monetization program, approved by the Board of Directors on September 2, 2022, which sets forth a plan to fully monetize the Company’s land bank over the next three years through the sale or introduction of partners to develop the land bank and its subsequent sale.
Under the Agreement, Danube will use 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.
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.
Mr. Jassim Alseddiqi, Chairman of Eshraq Investments said: “We are pleased to enter into this Agreement with Danube Properties, one of the most dynamic private real estate developers in the UAE. The 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.”
Mr. Rizwan Sajan, Founder and Chairman of Danube Group, says, “We are pleased to partner with Eshraq in acquiring two land plots at Jumeirah Village Circle (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.”