UAE developers seek financing from Europe

State-owned European banks get active in UAE’s project space

UAE developers with new projects could be looking to Europe to access cheaper funding options. Dubai Investments’ Khalid Bin Kalban is definitely giving it a thought.

For the recently announced Dh1 billion mixed-use project in Ras Al Khaimah, the DI CEO, says three funding options are in front of him. “For one, it could be straight funding from local banks plus our own equity,” said Bin Kalban. “A second option would be to bring in contractors who will provide funding as well as their equity.

“And a third, promising, alternative would be to sign up European banks, as they can guarantee low-cost financing support from their governments. In fact, these funds are available at very cheap rates. It will definitely be an option we will consider — unless someone comes up with other proposals.”

On a roll

UAE’s project funding market is buzzing with activity all over again, whether for infrastructure, new residential or commercial projects, and industrial ventures. Amid all this, project funding options are also opening up.

With borrowing rates set to rise, cost of financing will also be heading up shortly. So, if there are funding sources available that can provide longer tenor disbursal’s, then UAE developers will be giving them some serious attention.

In the past, Chinese lenders have been the most prominent sources of funds. The only proviso would be that project promoters here use Chinese construction companies and building materials.

As for Dubai Investments, the Dh1 billion Ras Al Khaimah venture will see it swing into full activity. The developer, known more for its industrial parks in Dubai, has been expanding its interests in some of the other emirates. The Ras Al Khaimah project, however, is its most ambitious. Located on Al Marjan Island, the resort will have 300 hotel keys, apart from 160 villas and up to 400 apartments.

Getting invites to build

The Dubai Investments’ Fujairah project featuring a new office tower will be ready by the end of this month. “These projects help us expand our footprint beyond Dubai, creates new investment opportunities,” said Bin Kalban.

As to whether plans have been finalised for any Dubai Investments Park-type economic zones outside of Dubai, the CEO said: “A lot of those plans were delayed by the Covid-19. Now, we are starting to get these back on track.”