Emaar Properties PJSC and Emaar Malls Management LLC have been upgraded to BBB- Outlook Stable by S&P Global after record property sales in 2021.

The ratings agency said leverage metrics improved faster than expected in 2021 and will likely continue in 2022-2023 because the group is using excess cash to repay its debt.

S&P highlighted Emaar Properties sales of AED 27.4 billion ($7.5 billion) amid rebounding demand for residential real estate.

“S&P view Emaar Malls Management LLC (Emaar Malls) as material and core to parent Emaar Properties, which would provide all necessary financial and operational support in case of need after increasing ownership to 100 percent, leading S&P to view the credit quality of both companies as equal,” the agency said.

The long-term issuer credit and issue ratings on Emaar Properties and Emaar Malls as well as their respective debt S&P were therefore raised to BBB- from 'BB+.

The research update from S&P said Emaar Properties’ presales exceeded their expectations in 2021, and that they were anticipated to remain very strong in 2022.

“Notably, as one of the UAE’s prime developers, the group stands to benefit from the promising forecast for Dubai residential real estate over 2022-2023,” the update said. 

“This follows positive momentum that began at year-end 2020 and continued into first-quarter 2022, with double-digit year-on-year price increases for apartments and villas.”

S&P said Dubai remains an attractive haven for visitors and residents, with the population expected to grow two percent per year due to government measures intended to simplify visa processes and corporate ownership rules for expats.

“We don't anticipate the introduction of corporate tax (cash impact for corporates from 2024) will deter international businesses given the expected low rate,” the ratings agency said.

(Writing by Imogen Lillywhite; editing by Daniel Luiz)