S&P Global Ratings has upgraded Emaar Properties' long-term issuer credit rating based on expectations of a more robust business performance amid the strength of Dubai's property market.
The upgrade to "BBB" from "BBB-", with a stable outlook, reflects the attractiveness of projects from Dubai's biggest listed developer, benefitting from positive property trends in the emirate, the ratings agency said in a statement.
The outlook mirrors S&P's projection that Emaar will continue to demonstrate steady operating performance and low leverage while being able to sustain its strong market position and capture the bulk of renewed interest from international buyers, it said.
S&P also noted that Dubai's business-friendly environment, market dynamics and reputation as a safe haven in the Middle East will also play key roles in supporting its business.
"Dubai remains an attractive business and residential destination, given that it offers low taxation despite the introduction of a 9 per cent corporate tax starting June 2023," S&P said.
"The stable outlook reflects our expectation that the company will sustain strong credit metrics in 2023-2024 on the back of the market rebound and debt reduction efforts completed pre-pandemic in 2019, which we expect to continue as we expect to see healthy demand."
Dubai's property market has continued its recovery from the Covid-19 pandemic, boosted by renewed interest from investors and buyers.
The industry had a record-breaking year in 2022, registering 90,881 transactions, exceeding the previous high of 81,182 in 2009, property consultancy CBRE said in its recent Dubai Residential Market Snapshot report.
Dubai's property market also registered strong growth in the first quarter, with total transaction value up 80 per cent annually to Dh157 billion ($42.8 billion) in the first quarter of 2023, according to official data. Total transactions rose 49 per cent to 38,715 during the three-month period.
"Off-plan properties accounted for roughly half of all deals, and prices continued to increase at double-digit rates, benefitting all developers who have been actively launching new projects," S&P said.
Emaar — the developer of the world's tallest building, the Burj Khalifa — reported in May that its first-quarter profit had surged 43 per cent to Dh3.2 billion, with revenue reaching Dh6.3 billion, boosted by strong property sales and operations across its units.
The company's property sales backlog hit Dh55.7 billion, which it said will be recognised as revenue in the coming years — a positive sign that the company will be able to improve future revenue, S&P said.
S&P noted the strength of Emaar's portfolios locally and overseas, which have helped the company's bottom line and complemented its UAE base.
"We estimate that Emaar Properties generated about 53 per cent of its gross profit from real estate development, both in the UAE and internationally, mainly in Egypt, India, Turkey and Pakistan."
And with developers having moved to full cash collection during construction phases and on handover for recent projects, this allows developers to de-risk the construction much faster and also alleviates working capital pressure, reducing funding requirements, S&P said.
"With close to Dh29 billion in CFO [cash flow from operating activities] generated in 2021-2022 cumulatively, Emaar by far outpaced its historic cash flow generation, with only Dh5.1 billion CFO in four years over 2017-2020," S&P said.
"This illustrates the strong pre-sale momentum, with the company collecting massive down payments, [and] also accelerating collections on new projects."
Compared with other private developers in Dubai, Emaar benefits from a large landbank, "which further enhances its competitive position and reduces future cash flow requirements in potentially more challenging market conditions", S&P said.
Dubai remains an attractive business and residential destination, given that it offers low taxation despite the introduction of a 9 per cent corporate tax starting June 2023,
S&P Global Ratings
Government data shows Dubai's economy expanded 4.6 per cent on an annual basis in the first nine months of 2022. S&P estimates that the emirate's GDP rose by 4.4 per cent for the entirety of last year, compared with 3.6 per cent globally.
S&P projects 3 per cent GDP growth for 2023, backed by "continued strong momentum" in key sectors including hospitality, real estate, trade and financial services.
Business activity in Dubai's non-oil private sector economy continued to improve at a “robust pace” in May, boosted by stronger output and employment.
The emirate's seasonally adjusted S&P Global purchasing managers' index reading softened slightly to 55.3 in May, remaining well above the neutral 50 mark that separates expansion from contraction, S&P reported earlier this month.
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Three tips from La Perle's performers
1 The kind of water athletes drink is important. Gwilym Hooson, a 28-year-old British performer who is currently recovering from knee surgery, found that out when the company was still in Studio City, training for 12 hours a day. “The physio team was like: ‘Why is everyone getting cramps?’ And then they realised we had to add salt and sugar to the water,” he says.
2 A little chocolate is a good thing. “It’s emergency energy,” says Craig Paul Smith, La Perle’s head coach and former Cirque du Soleil performer, gesturing to an almost-empty open box of mini chocolate bars on his desk backstage.
3 Take chances, says Young, who has worked all over the world, including most recently at Dragone’s show in China. “Every time we go out of our comfort zone, we learn a lot about ourselves,” she says.
Difference between fractional ownership and timeshare
Although similar in its appearance, the concept of a fractional title deed is unlike that of a timeshare, which usually involves multiple investors buying “time” in a property whereby the owner has the right to occupation for a specified period of time in any year, as opposed to the actual real estate, said John Peacock, Head of Indirect Tax and Conveyancing, BSA Ahmad Bin Hezeem & Associates, a law firm.
Killing of Qassem Suleimani
Where to donate in the UAE
The Emirates Charity Portal
You can donate to several registered charities through a “donation catalogue”. The use of the donation is quite specific, such as buying a fan for a poor family in Niger for Dh130.
The General Authority of Islamic Affairs & Endowments
The site has an e-donation service accepting debit card, credit card or e-Dirham, an electronic payment tool developed by the Ministry of Finance and First Abu Dhabi Bank.
Al Noor Special Needs Centre
You can donate online or order Smiles n’ Stuff products handcrafted by Al Noor students. The centre publishes a wish list of extras needed, starting at Dh500.
Beit Al Khair Society
Beit Al Khair Society has the motto “From – and to – the UAE,” with donations going towards the neediest in the country. Its website has a list of physical donation sites, but people can also contribute money by SMS, bank transfer and through the hotline 800-22554.
Dar Al Ber Society
Dar Al Ber Society, which has charity projects in 39 countries, accept cash payments, money transfers or SMS donations. Its donation hotline is 800-79.
Dubai Cares
Dubai Cares provides several options for individuals and companies to donate, including online, through banks, at retail outlets, via phone and by purchasing Dubai Cares branded merchandise. It is currently running a campaign called Bookings 2030, which allows people to help change the future of six underprivileged children and young people.
Emirates Airline Foundation
Those who travel on Emirates have undoubtedly seen the little donation envelopes in the seat pockets. But the foundation also accepts donations online and in the form of Skywards Miles. Donated miles are used to sponsor travel for doctors, surgeons, engineers and other professionals volunteering on humanitarian missions around the world.
Emirates Red Crescent
On the Emirates Red Crescent website you can choose between 35 different purposes for your donation, such as providing food for fasters, supporting debtors and contributing to a refugee women fund. It also has a list of bank accounts for each donation type.
Gulf for Good
Gulf for Good raises funds for partner charity projects through challenges, like climbing Kilimanjaro and cycling through Thailand. This year’s projects are in partnership with Street Child Nepal, Larchfield Kids, the Foundation for African Empowerment and SOS Children's Villages. Since 2001, the organisation has raised more than $3.5 million (Dh12.8m) in support of over 50 children’s charities.
Noor Dubai Foundation
Sheikh Mohammed bin Rashid Al Maktoum launched the Noor Dubai Foundation a decade ago with the aim of eliminating all forms of preventable blindness globally. You can donate Dh50 to support mobile eye camps by texting the word “Noor” to 4565 (Etisalat) or 4849 (du).
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