Dubai-based developer Union Properties PJSC said on Wednesday that it has bought a 5.68 percent stake in Palm Hills Developments (PHD), a leading real estate developer in Egypt, as part of an investment expansion plan.

In a statement to Dubai Financial Market, the company said it acquired the stake through its investment arm, UPP Capital Investment, which was created last year to carry out direct and indirect real estate investments.

Union Properties said it decided to buy the "strategic" stake in PHD as part of a plan to diversify income and expand its investments abroad.

On Monday, a Reuters report quoting an Egyptian Exchange (EGX) statement said UPP Capital Investment had acquired 16 million shares of PHD for a total value of 64 million Egyptian pounds ($3.62 million).

The Dubai developer had reported a third quarter net loss of 45 million UAE dirhams for the three months ending September 30, 2017, compared with a net profit of 32 million dirhams in the corresponding period in the previous year.

PHD, which was founded in 2005 and is listed on the Cairo and London bourses, reported a 16 percent year-on-year increase in net profit to 457 million pounds (approximately $26 million) for the first nine months of 2017.  Its sales also jumped by nearly 44 percent year-on-year to $8.1 billion pounds ($457.7 million).

The company's investment portfolio, one of the largest in Egypt, covers 41 million square metres and 26 real estate projects.

(1 USD = 17.6751 EGP)

(Writing by Nadim Kawach; Editing by Anoop Menon)

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