Dubai group to increase Mirvac stake

Dubai group to increase Mirvac stake

DUBAI'S property behemoth Nakheel plans to increase its stake in property developer and fund manager Mirvac Group to just under 20 per cent, according to Nakheel's chief financial officer Kar Tung Quek.

Nakheel, developer of palm-shaped islands off Dubai's coast, topped up its initial Mirvac holding through a $5.20 placement in January to accumulate 12.5 per cent of the group for a total of $680 million.

Its investment has since plummeted. Mirvac shares closed yesterday at $3.17, down 1c on the day.

Mirvac chief executive Greg Paramor said: "Any shareholder can add or subtract from their shareholding.

"We have a fantastic relationship with Nakheel. We have healthy respect for them and, we hope, them for us."

Last week, Mirvac flagged a profit downgrade due to Australia's weak property market and said it would write $300million to $400million off its $7.5billion property portfolio.

"Because of the credit crisis, we have many investment banks knocking on our door with big piles of opportunities in the US, UK, Australia and China," Mr Quek told the Reuters Global Real Estate Summit this week.

"We are looking for partners in Asia, Europe and maybe the US. We'd like the company to be listed."

Mr Quek said the company planned to launch one or two real estate investment funds worth up to $5billion in the next two months to finance projects in Dubai.

In April, the firm reported a near fivefold surge in 2007 profits to $US1.28 billion from the year before after selling more land and building fewer homes.

The developer's outstanding loans more than doubled to 10.16billion dirhams ($3billion) in the year to December 31. Its biggest facility, at 6.7billion dirhams, matures in 2012.