Global developer Emaar Properties PJSC (DFM: EMAAR) has been upgraded to Baa3 long-term issuer rating by Moody’s Investor Service with ‘stable’ outlook highlighting its financial strength and ability to create sustained shareholder value through its ongoing projects and assured recurring revenues from its malls and hospitality businesses.
Mohamed Alabbar, Chairman of Emaar Properties, said: “The upgraded ratings underline the strong financial fundamentals of the company and our focus on sustained value creation for our stakeholders. This year, Emaar and Emaar Malls together have distributed over AED 2.375 billion (US$ 646 million) in dividends, defining the significant value that we bring to our shareholders. We are continuing to build on our robust credentials with iconic projects that support the vision of HH Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President & Prime Minister and Ruler of Dubai, to establish the city as a global hub of business, tourism and leisure.”
He added: “Emaar has recorded significant growth in property sales in our core market of Dubai and other international markets. We have a total backlog in the UAE alone valued at AED 28.3 billion to be recognised over the next four to five years. Having delivered over 40,200 homes already, we have nearly 13,000 residential units in development in the UAE, defining a robust development pipeline. Our land bank of over 195 million sq m in Dubai and international markets supports our growth aspirations.”
He added: “The Dubai Creek Harbour development anchored by the iconic tower, the progress achieved on Dubai Hills Estate, the ongoing expansion of The Dubai Mall, and the opening of Dubai Opera this year - are all strong growth drivers for the company that create long-term value. This upgraded rating is a firm testament to the international investor confidence in our growth strategies and our ability to deliver on our promise.”
In its report, Moody’s stated: “We believe that Emaar's market leadership position and balance sheet strength - in combination with stable recurring revenues and a sizeable property sales backlog - will support the company's credit profile during the currently challenging market conditions and as it enters a phase of elevated capex ahead of the Dubai World Expo 2020.”
Among the headline developments of Emaar is The Tower at Dubai Creek Harbour, a new icon that will contribute significantly to the tourism and retail sectors of the city. It will also create outstanding value for the 6 sq km master-planned development similar to the strong value creation by Burj Khalifa for Downtown Dubai and the city as a whole.
Designed by renowned Spanish/Swiss neo-futuristic architect, structural engineer, sculptor and painter Santiago Calatrava Valls, The Tower serves as the vibrant core of Dubai Creek Harbour, which is two times the size of Downtown Dubai and located 10 minutes from the Dubai International Airport. It is billed to be the destination for the world to visit, enjoy and celebrate life, as Dubai prepares to host the Expo 2020.
Welcoming more than 124 million visitors across its malls assets in 2015 and over 31 million visitors during the first quarter of 2016, Emaar is expanding its portfolio with the launch of a dedicated Retail District in Dubai Creek Harbour that will be linked to the new tower that forms the vibrant heart of the development.
Emaar Malls has a gross leasable area of about 6 million sq ft. This is being expanded with the ongoing addition of another 1 million sq ft built-up area at The Dubai Mall’s Fashion Avenue to add another 150 leading international and local brands. These retail sector expansions will offer additional lifestyle choices for the 2.5 billion plus people, especially high net worth individuals, who are only four hours flying distance from Dubai.
Emaar Hospitality Group is also expanding its portfolio with 35 new hotels and serviced residences to open under its three flagship brands – The Address Hotels + Resorts, Vida Hotels and Resorts and Rove Hotels - in Dubai, the UAE and key international markets. In addition to opening of new properties in Dubai, the company has secured new management contracts to operate hotels and serviced residences in Fujairah in the UAE and Saudi Arabia. Emaar has also signed management contracts for upcoming hotels and serviced residences projects in Bahrain, Turkey and Egypt.
Emaar recorded first-quarter (January to March) 2016 net profit of AED 1.205 billion (US$ 328 million), an increase of 17 per cent compared to the same period last year. Led by significant progress in construction of its projects, Emaar’s Q1 2016 revenue was AED 3.529 billion (US$ 961 million), 17 per cent higher than the Q1 2015.
Emaar recorded Q1 2016 revenue of AED 1.974 billion (US$ 537 million) from its property business alone, 32 per cent higher than the same period in 2015. Overall sales value was AED 5.151 billion (US$ 1.402 billion) with the value of sales in Dubai at AED 4.194 billion (US$ 1.142 billion), 70 per cent higher than the first quarter of 2015.Today, Emaar has assets valued at over AED 165.7 billion (US$ 45.1 billion).