Dubai – Dubai state developer Nakheel is considering the deal of its district cooling benefits, three sources knowing the matter told Reuters, as real estate companies in the United Arab Emirates unload non-core activities between the coronavirus downturn.
Nakheel, the developer of the emirate’s palm-shaped islands, has employed financial advisory Synergy Consulting to manage the process, provided by the two of the sources who refused to be named as the issue was not public.
Nakheel rejected to make any statement and Synergy did not respond to a request for comment.
District cooling firms provide chilled water through insulated pipes to offices, along with industrial and residential buildings.
Nakheel’s planned deals come after Dubai’s real estate sector, inactive for most of the previous decade, took a further hit from the COVID-19 pandemic, which resulted in many foreign workers leaving and aggravate oversupply problems.
Emaar Properties, Dubai’s largest developer, sold a stake of its downtown cooling business the previous year for $675 million, whereas Abu Dhabi’s Aldar Properties agreed to sell two district cooling benefits in December.
Independently, Dubai is thinking about selling a stake in the cooling framework tasks of Dubai International Airport and has employed Standard Chartered to arrange the cycle, sources acquainted with the matter told Reuters in November.
Dubai-listed National Central Cooling Co (Tabreed) and Emirates Central Cooling System Corp (Empower)have shown their interest in Nakheel’s transaction, the sources said.
The two companies did not straight away respond to ask for comment.
One of the sources provided that the transaction, which could be counted at about one billion dirhams ($272.27 million), is structured as a 30-year compromise agreement.
Nakheel’s district cooling benefits contain 20 units around Dubai with a whole capacity of 100,000 to 120,000 tonnes of refrigeration.
The developer, which was constrained into a huge obligation rebuilding following the 2009-2010 real estate crash in Dubai, a year ago sliced pay rates by however much half as it attempted to weather the Covid emergency.
($1 = 3.6728 UAE dirham)