ABU DHABI, April 16 Abu Dhabi government fund
Mubadala is considering forming a venture with loss-making real
estate developer Eshraq Properties in the latest
example of Abu Dhabi state money coming to the aid of a local
company that has run into difficulties.
Mubadala and Eshraq are exploring opportunities
to establish a joint real estate development venture in Abu
Dhabi, they said in a statement on Sunday.
The proposed venture would develop plots of land in Abu
Dhabi owned by Mubadala on Al Maryah Island and by Eshraq on Al
The statement did not give further details of how the
venture would work, but Mubadala's participation could be
important for the finances of Eshraq, which reported a 2016 loss
of 543 million dirhams ($148 million).
Abu Dhabi's property market has been hit as low oil prices
weigh on the economy. Average selling prices of apartments fell
1 percent and villa prices dropped 9 percent in the three months
through March 31 compared to the last quarter of 2016, property
specialists Chestertons estimated.
Abu Dhabi's government is one of the richest in the Gulf,
however, and in the last few years state institutions have
stepped in to assist companies suffering losses.
In 2011, the government bailed out indebted Aldar Properties
and in the same year Tabreed secured a lifeline from
Mubadala to tackle its massive debt. In the last couple of
weeks, Abu Dhabi's state utility raised its stake in loss-making
Abu Dhabi National Energy Co and granted the energy
company land that could potentially wipe out its losses.
(Reporting by Stanley Carvalho, Editing by Andrew Torchia and