Deyaar Development has secured Dh200m from regional investors for a new distressed asset fund that will buy property from buyers who default on their payments.
Markus Giebel, Deyaar chief executive, said the creation of the fund was the final step in a strategy to lower the company’s default rate from about 50 per cent to the low single digit range.
'The fund is finished and ready to go,' he said. 'We are going on a roadshow to Saudi Arabia and other countries in the next couple of weeks. There is still strength and liquidity in the region.'
The close-ended fund, which has been established along with Dubai Islamic Bank, would be between Dh500m and Dh1bn. It would work by buying defaulted property from Deyaar and holding onto the units for several years and reselling them for a profit.