International real estate firm Hines plans to set up a $1 billion distressed asset fund focusing on the United Arab Emirates, a company official was quoted on Saturday as saying.

Jurgen Herre, Hines' head of Middle East and North Africa region, said the company aimed to raise between $250 million and $50 million from regional funds and investors, the National newspaper reported.

The fund would have about $1 billion worth of firing power with leverage in combined debt and equity for distressed properties in the UAE and possibly the wider region, Herre said, adding that the money could be used to make up to 12 large investments.

For the last two years we did not invest because we felt there would be a price correction, Herre was quoted as saying. But in six to nine months, we will start investing equity into projects with our institutional partners. There are major opportunities now.

Real estate prices have slumped in the UAE since the global financial crisis brought to an end a regional economic boom late last year.

The downturn has prompted developers to cancel scores of projects and led to thousands of job cuts, particularly in Dubai, raising the risk of home loan defaults as the crisis hit the Gulf Arab trade hub's once-booming property sector.

The fund, which Hines plans to launch in six to nine months, could help some stalled developers to proceed with their projects, the newspaper said, adding that the launch could be delayed if oil prices fall significantly or if the crisis worsens.

Privately owned Hines currently controls assets valued at approximately $25.8 billion, according to its website.

(Writing by Firouz Sedarat)