Dubai's Union Properties, hit hard by the financial downturn, said on Monday its luxury Ritz Carlton hotel in the Gulf emirate could be sold for a sum close to Dh1.5 billion ($408.4 million).

'It could be sold for a price very close to this number,' the third-largest developer by market value said in a statement on Dubai's bourse website.

The firm issued the statement correcting an article published by a local newspaper which said the hotel would be sold for a price very close to Dh1.5 billion.

Union Properties general manager Khalid al-Jarwan declined to comment whether the hotel would be sold. 'It is a wealthy asset and a high-end hotel,' he told Reuters.

'If there is any requirement for sale it will be close to the amount mentioned. If it materialises it will take care of a lot of the company's expenses.'

In January, Credit Suisse slashed its price target for the stock to 0.03 dirhams from 0.80 dirhams and said even if Union Properties overcame its liquidity squeeze, there would not be much equity value left after meeting its debt obligations.

Union's chairman Khalid bin Kalban said in January the firm's Dh6.5 billion debt position, which it was due to begin paying back in 2010, is now due in 2011.

The firm said in its statement on Monday it has 5,000 units that will be transferred to its rental portfolio, which will be worth Dh500 million a year.

The Ritz Carlton hotel, which is based at the Dubai International Financial Centre, will be handed over to investors in May, Kalban said last month. The 15-storey hotel will be the second Ritz Carlton hotel in Dubai.

The firm's shares were up 2 per cent at 0.5 dirhams a share at 0751 GMT.-Reuters