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UP vs Damac

Both are Dubai-based mega-developers, but which one would you invest your hard earned cash with?

Union Properties

History
Union Properties (formerly Union Properties Private Limited) was established in 1987 with a net asset worth of AED1 million. Over the course of 20 years, the property developer has built and launched over 24 projects, including high rises and master developments. Today, UP is considered one of Dubai’s most experienced developers. UP is part of the Emirates Bank Group. It’s not an exciting history. Score: 5

Projects
UP’s projects vary from single towers to large scale communities throughout Dubai. A number of its projects are centered around the creation of ‘communities’, such as UPTOWN Mirdiff and the Green Community. The service charges are high (some Green Community residents pay up to AED18,000 annually), but the communities boast enviable public spaces rarely seen in Dubai. Score: 8

Financials
In 1993, UP floated as a public company, thus forcing it to publicize its financial details. The most recent financial report found on the developer’s website details the company’s 2008 Q3 financials. According to the report, UP’s total sales for the nine months period ending on September 30, 2008 was 301.81million, a 25 percent drop from the same period in 2007. Profits are down, but at least the public knows about it. Score: 9

Service
Like most developments in the UAE, UP’s projects aren’t always completed on time. Buyers are not compensated for the inconvenience caused by the delay. However, the employees at the service centers and the management offices are helpful. Score: 5

Global network
Other than the deal UP signed with the Formula One Administration (FOA) to develop F1 themed projects around the world, UP’s developments are all located within the UAE. Score: 3

Final Score: 30

 
 

2 Comments

  1. Smell the Coffee on January 15, 2009 11:55 am

    At face value there is a comparision to consider between Damac and Union Properties. However, dig a little deeper and there’s no comparison at all.

    Union Properties is a well established company who’s finances and solvency are open to audit scrutiny. Damac whoever is a private company who’s finances and solvency are under no scrutiny at all from nobody.

    Also, Union Properties has a visible track record of actually providing customers with what they’ve paid for (i.e. apartments) whereas Damac has almost no track record at all. In fact, despite Damac Properties being established around 6 years it has so far only produced THREE or FOUR Developments from the FIFTY or SIXTY it says it is building!

    Worse still, with the ‘Off-Plan’ scandal that’s occured in Dubai over the boom years, Damac will have got the cash from investors for the fifty or sixty projects it claims it is building. However, now that the ‘bubble’ has well and truly burst in the Dubai real estate market, what chance is there of Damac ever completing these fifty or sixty projects? None at all. I read under another report on here that in fact Damac has already CANCELLED many of these projects. If this is true, with a company that’s under no financial scrutiny at all, I’d be a very worried person indeed if it was my hard earned cash they’ve alreday got! For the same reason you’d have to me a bit of a fool to invest any new cash with them!

    p.s. I think under ‘Global Network’ Damac’s score should be Nil. I’m not aware they’ve built anything (and probably never will) in any of the Countries you mention!

     
  2. Ajmal Bhatty on December 28, 2009 9:08 am

    I totally agree with the letter posted on your website about comparison between UP and Damac where it says one would be a fool to invest in anything Damac would offer off-plan. They are not transparant in their dealings and how could the authorities have allowed then to have so many off-plan projects and only complete so few. All the money from off-plan projects is not supposed to be Damac’s money. It is the investors money sitting in the Escrow accounts. The very meaning of the word ‘ESCROW’ has changed in the vocabulary of the developers in Dubai. It means if your money is in Escorw account in Dubai, it is not safe unless the likes of Damac and the authorities care to change its meaning to guarnatee its safety and pay penalties on this money to investors for all the delay in completing these projects. The authorities can do so much to restore investors confidence and this act (of restoring the meaning of Escrow to its true meaning just described)would be one positive step towards it.

     

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