Brisk presales spur ‘plentiful cash flow” for Dubai developers

Brisk presales spur ‘plentiful cash flow” for Dubai developers

Analysts at S&P Global Ratings argue that given the high number of new property launches in 2021-22, which they expect to continue in 2023, and assuming a three- to five-year lead time, working capital requirements will remain high

Published: Sun 12 Mar 2023, 5:06 PM

Cash flow generation of Dubai property developers will continue to benefit from healthy presales and favourable payment terms while a predicted stable growth of the real estate sector will support steady profitability and improving credit metrics in 2023, market pundits say.

Analysts at S&P Global Ratings argue that given the high number of new property launches in 2021-22, which they expect to continue in 2023, and assuming a three- to five-year lead time, working capital requirements will remain high. However, scheduled handover payments will support cash flow from 2024.

“We expect continued deleveraging and improving rating headroom for Dubai-based real estate companies in 2023. We also expect ample liquidity and limited funding needs,” says Tatjana Lescova, associate director GCC Corporate at S&P Global.

“Plentiful cash flow leaves headroom for higher capital expenditure, dividends, or acquisitions or coworking spaces to disrupt the market, as demand is healthy, but downsizing risk persists growth will support strong cash flow, steady profitability, and improving