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Bond Market News
Emaar Properties Upgraded to BBB by S&P
June 28, 2023
Emaar Properties was upgraded to BBB from BBB- by S&P citing its strong performance with a healthy balance sheet. It said that Dubai’s domestic real estate market was experiencing strong demand and improved pricing, helping the company benefit where it is the largest developer. For instance, real estate transactions rose by over 50% last year. Emaar’s pre-sales jumped 26% YoY in Q1, helping improve revenue visibility with a solid backlog of AED 55.7bn ($15.2bn). Emaar’s net leverage dropped to 0.7x, the lowest level achieved since 2017. It is expected to have strong operating cash flows in 2023-24 given the above developments. Besides, Emaar Properties benefits from its large landbank, improving its competitive position and reducing future cash flow requirements. Emaar plans to build a residential rental portfolio hoping to reach 3,000 units over the next five years, further lifting revenue generation. S&P however notes that the sector is cyclical in nature and thus could change and pose challenges.
Emaar Properties’ 3.7% 2031s were trading stable at 91.44, yielding 5.01%.
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