S&P raises Dubai’s Emaar Properties outlook to stable

S&P Global said on Sunday it had raised its outlook for Emaar Properties, Dubai’s largest listed developer, and its majority-owned Emaar Malls to stable from negative.

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S&P said the outlook was revised as Dubai’s residential real estate sector was gaining momentum, with prices rising in some areas for the first time since 2015.

“We expect a rebound in the company’s earnings and credit metrics in 2021, with EBITDA likely to exceed AED8 billion (dirhams) and funds from operations (FFO) to debt to improve to about 30 percent,” S&P said.

It kept a long-term issuer credit rating of BB+ for Emaar Properties, issuer credit rating of BB+ for Emaar Malls and its bbb+ stand alone credit profile for Emaar Malls.

Emaar Properties shares were trading up 1.2 percent on the Dubai stock market on Sunday.

S&P said it expected Emaar Properties would deliver about 6,000 units this year and close to 10,000 units in 2022, up from 4,800 in 2020.

S&P said first quarter data suggested Dubai’s residential had bottomed out. It said overall prices had fallen at a low single digit rate in the first quarter, although prices of higher end properties had actually risen.

Sales of luxury villas, sea-view apartments and second-hand family houses have jumped this year as buyers take advantage of decade-low prices, easy financing and an economy open for business despite the COVID-19 pandemic.

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