UAE-based leading property developer, Nakheel is reportedly considering the sale of its district cooling assets, as real estate firms in the country sell assets amid the coronavirus downturn.
According to reliable sources, Nakheel, the developer of the emirate’s palm-shaped islands, has hired US-based financial advisory Synergy Consulting to oversee the process. Synergy did not respond to a request for comment, and Nakheel has declined to comment about the deal.
Dubai-listed National Central Cooling Co (Tabreed) and Emirates Central Cooling Systems Corp (Empower) have expressed interest in Nakheel’s deal, the sources added. Tabreed said in a statement, that as a listed company it cannot comment on market rumors or speculation and requests for comment were not immediately addressed by Empower.
The contract, which could be worth about $272 million (one billion dirhams), is structured as a 30-year concession agreement, according to one of the sources.
District cooling companies deliver chilled water to offices, as well as industrial and residential buildings, through insulated pipes. Nakheel’s district cooling assets include 20 units around Dubai with a total refrigeration capacity of 100,000 to 120,000 tonnes.
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 said.
As per the reports, the pandemic hit Dubai’s real estate market, which had been sluggish for much of the previous decade, causing many foreign workers to flee and worsening oversupply.
Dubai’s largest developer, Emaar Properties has sold a stake in its downtown cooling business for $675 million last year, while Aldar Properties in Abu Dhabi has agreed to sell two district cooling assets in December.