Moody’s affirms Emaar Properties’ Baa3 ratings; changes outlook to stable from negative

Moody’s affirms Emaar Properties’ Baa3 ratings; changes outlook to stable from negative

The decision to change the outlook to stable from negative reflects Emaar’s strong operating performance supported by the improving macroeconomic outlook for the Emirate of Dubai. In 2021 and Q1 2022, Emaar’s property development business recorded robust revenue growth. This was due to the accelerated pace of construction and unit handover which led to high revenue recognition, as well as off-plan sales stemming from existing development projects and new launches.

As of December 31, 2021, Emaar had a total revenue backlog of Dh46 billion to be recognised over the next 3-4 years which offers strong revenue visibility. This strong operating performance is supported by a positive market sentiment resulting in solid demand from local and international investors. Successful vaccination campaign, limited travel restrictions and tourist inflows particularly during Expo Dubai 2020 supported international demand. At the same time, local demand increased because more end-users have taken the opportunity to enter the market as it became more affordable in 2020-2021.

As of Q1 2022, residential prices continued to increase with average increases of 11 per cent in Dubai, according to Jones Lang Lassalle, and they are now close to the peak observed in late 2014. However, Moody’s believes that rising interest rates and