Emaar Gains from Dubai’s Strong Real Estate Trends as Market Leader
S&P Global upgraded Emaar Properties’ rating to ‘BBB+’ with a stable outlook on Monday, citing the company’s significant growth in Dubai’s residential real estate sector.
“The upgrade reflects Emaar’s strong performance in residential development, alongside the steady growth of its malls, hospitality, and entertainment sectors, which add stability to its cyclical business,” the ratings agency stated.
As of December 31, 2024, Emaar’s revenue backlog reached a record Dh110 billion, driven by robust domestic residential real estate sales. The company maintained strong credit ratios, with revenue rising 33 per cent and Ebitda increasing by 12 per cent in 2024. Emaar also held a net cash position, with Dh19.1 billion in discretionary cash flow.
“We anticipate strong operating cash flow in 2025-2026, supported by solid demand and a healthy balance sheet, despite rising capex, dividend payouts, and the cyclical nature of Dubai’s real estate sector, which is currently at a peak,” wrote analysts Sapna Jagtiani, Fares Shweiky, and Pierre Gautier.
S&P projects continued strong revenue growth through 2025-2026, with adjusted Ebitda margins of 42-45 per cent, ensuring stable financial metrics despite increasing expenditures.
The agency highlighted Emaar’s dominance in Dubai’s real estate sector, leveraging its strong reputation and having delivered over 74,400 units. With 42,003 units under development, including joint ventures, and a 93 per cent presold rate, Emaar is set to maintain its market leadership, attracting international buyers due to its strong brand and high asset quality, giving it a pricing edge over competitors.
Emaar’s significant backlog enhances revenue visibility for the next two years. “Leading developers can now secure full cash payments during construction or at handover, with faster cash collection—70-80 per cent received during construction and the remainder at handover. This speeds up de-risking, eases working capital pressures, and reduces funding needs, strengthening resilience during downturns. These factors contributed to our decision to upgrade, recognizing Dubai’s current real estate cycle is highly favorable,” the analysts noted.
Dubai’s residential market has seen strong growth, fueled by demand from residents and international investors. S&P predicts Dubai’s economy will remain supportive, with GDP growth averaging around 3 per cent from 2024-2027. At the end of 2023, Dubai’s population (excluding commuters) reached 3.7 million, according to the Dubai Statistics Centre. Property prices are expected to remain stable over the next 18 months before potentially normalizing as supply increases.
“Dubai remains a top business and residential destination due to its low taxation—despite the 9 per cent corporate tax introduced in June 2023—liberalized social laws, and reputation as a regional safe haven,” the report concluded.
