Union Properties shares have fallen to their lowest price on record after the company said it made significant provisions to cover losses for contracting costs and declining property valuations.

The developer of Dubai’s Motor City said it had swung to a loss of Dh498 million ($135.5m) last year, sending its shares down by 2% to close at Dh0.49 yesterday.

Rising defaults among homeowners have hurt the profits of developers this year. Struggling investors have been missing payments on properties that were bought off-plan and are now worth up to 50% less than they paid for them.

Union Properties, which lost about 90% of its value in the past 18 months because of the downturn, is depending on asset sales and rentals to boost its income.

The National