Dubai: Union Properties’ stock has soared by an impressive 40% since the beginning of the year, making it the best-performing share on the Dubai Financial Market (DFM) and across the broader UAE capital markets. In recent days, the developer’s stock saw a surge of over 20% before experiencing a slight pullback.
In contrast, the wider DFM index has dipped by 0.4% year-to-date, while the ADX general index has remained stable. This makes Union Properties’ rally a standout in an otherwise subdued market. “Emaar Developments has declined this year following a strong 2024 performance, while Aldar on ADX has gained 12% year-to-date,” said an analyst. “Investor sentiment appears to be the primary driver behind Union Properties’ surge, creating a remarkable rally.”
Market Sentiments and External Factors
The stock’s rise is particularly notable as investor sentiment in the UAE and GCC has been relatively muted, with concerns surrounding potential economic impacts of proposed U.S. tariffs under Trump’s policies. The uncertainty has led U.S. markets into correction territory, spooking investors globally.
Company Performance and Recovery
Despite the strong stock performance, Union Properties has yet to issue a statement on DFM explaining the reasons behind the surge. However, the developer has made significant strides recently, including launching its first new project in years at Motor City and improving its financial position by reducing debt.
For 2024, the company posted an operating profit of AED 161.8 million, marking a substantial 59% increase. After several years of underperformance and losses, Union Properties appears to be regaining financial stability.
Capital Restructuring and Investor Confidence
The company has also announced plans for a capital reduction to eliminate accumulated losses. “This move will complete the company’s recovery phase, ensuring a strong and clean capital structure that paves the way for future dividend distributions,” the company stated.
Analysts believe that Union Properties’ management is winning investor confidence through its recent efforts to address financial challenges and return to project development. “The company is back to launching projects, particularly in the mid-income residential segment,” noted an analyst. “Their work in developing Motor City as a destination strengthens their growth narrative.”
Outlook for UAE Stock Markets
Looking ahead, the UAE’s stock market performance may see a boost depending on major upcoming IPOs. Investors are particularly awaiting news on Etihad’s potential listing on ADX, which, if confirmed, could be a major market event. Meanwhile, Alpha Data’s IPO on ADX has already performed well, maintaining positive momentum since its debut.
For now, Union Properties remains in the spotlight, with investors closely watching to see if its strong run can sustain further gains.
