Dubai's Nakheel ponders sale of district cooling assets, say sources

Dubai

DUBAI state developer Nakheel is considering the sale of its district cooling assets, three sources familiar with the matter said, as real estate companies in the United Arab Emirates sell assets amid the coronavirus downturn.

Nakheel, the developer of the emirate's palm-shaped islands, has hired financial advisory Synergy Consulting to manage the process, said two of the sources who declined to be named as the matter was not public.

Nakheel declined to comment and Synergy did not respond to a request for comment.

Dubai-listed National Central Cooling Co (Tabreed) and Emirates Central Cooling Systems Corp (Empower) have expressed interest in Nakheel's deal, the sources said.

Tabreed said in a statement, that as a listed company, it cannot comment on market rumours or speculation. Empower did not immediately respond to requests for comment.

One of the sources said the deal, which could be valued at around one billion dirhams (S$366.3 million), is structured as a 30-year concession agreement.

District cooling firms deliver chilled water through insulated pipes to offices, as well as to industrial and residential buildings.

Nakheel's district cooling assets include 20 units around Dubai with a total capacity of 100,000 to 120,000 tonnes of refrigeration.

Separately, Dubai is considering selling a stake in the cooling system operations at Dubai International Airport and has hired Standard Chartered to arrange the process, sources familiar with the matter told Reuters in November.

Nakheel, which was forced into a massive debt restructuring following Dubai's 2009-2010 real estate crash, last year slashed salaries by as much as 50 per cent.

Dubai's real estate sector, sluggish for most of the past decade, has suffered during the pandemic, which led many foreign workers to leave and worsened over-supply.

Emaar Properties, Dubai's largest developer, sold a stake in its downtown cooling business last year for US$675 million, while Abu Dhabi's Aldar Properties agreed to sell two district cooling assets in December. REUTERS