World’s tallest tower developer Emaar gets ratings boost

Emaar Properties has received an improved outlook from S&P Global Ratings, helped by a recovering Dubai property market.

The developer of the world’s tallest tower was moved to a stable outlook from negative as property prices in some areas of the emirate improved for the first time since 2015. The developer has reported a surge in pre-sales in the UAE to AED10.5 billion ($2.85 billion) for the first five months of 2021, compared to AED6.3 billion reported for all of 2020.

S&P Global Ratings expect a rebound in the company’s earnings this year with earnings before interest, taxes, depreciation and amortization (EBITDA) likely to exceed AED8 billion.

“After a tough 2020, data for first quarter 2021 suggests that the residential real estate market in Dubai has bottomed out and now offers attractive opportunities for developers, especially for premium properties,” S&P said in a statement.

Although Dubai property sales prices continued to fall a low single digit rate in the first quarter of 2021, prices on many high-end developments gained.

Sales volume in Dubai increased 15 percent overall in the quarter.

“Given that Emaar Properties accounts for more than half of primary sales in Dubai and focuses specifically on premium properties, we think that it will materially benefit from the observed uptick in demand and higher prices,” S&P said. It expects Emaar to deliver about 6,000 units in 2021 after delivering 4,800 units in 2020.