As Emirati real estate firms abandon non-core activities amid the downturn caused by the Coronavirus, government-affiliated Nakheel Development Company in Dubai plans to sell district cooling assets.
According to Arabnet, quoting Reuters from informed sources who refused to reveal her name, the matter is not made public that Nakheel, which has developed palm tree islands in the UAE, has commissioned the financial advisory firm Snergy Consulting to take over the mission.
Nakheel declined to comment, and Snergy did not respond to a request for comment.
The sources said that the National Central Cooling Company (Tabreed) and the Emirates Central Cooling Systems Corporation (Empower) have expressed interest in the Nakheel deal.
Tabreed said in a statement that as a listed company, it could not comment on market rumors or speculation. Empower did not immediately respond to a request for comment.
One of the sources said that the deal, which could be valued at about one billion dirhams ($ 272 million), is in the structure of a 30-year concession agreement.
District cooling companies provide chilled water via insulated tubes to offices as well as industrial and residential facilities.
Nakheel District Cooling's assets include 20 units across Dubai with a total capacity between 100,000 and 120,000 tons of cooling.
Separately, sources familiar with the matter told Reuters in November that Dubai was considering selling a stake in refrigeration systems activities at Dubai International Airport and had tasked Standard Chartered with arranging the deal.
Last year, Nakheel, which was forced to restructure large debts after the collapse of Dubai's real estate sector in 2009 and 2010, cut salaries by as much as 50%.
The real estate sector in Dubai, which has witnessed a slowdown for most of the last decade, has been suffering since the start of the pandemic, which prompted many foreign workers to leave and exacerbated the oversupply.
Emaar Properties, the largest real estate developer in Dubai, last year sold a stake in its downturned cooling business for $ 675 million, while Aldar Properties in Abu Dhabi agreed to sell two District Post assets in December.
