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UAE developers have been steadily shifting toward diversified, recurring income portfolios, a trend likely to accelerate amid the current geopolitical tensions and rising uncertainty in the property market.
Dubai’s Emaar Properties and Abu Dhabi’s Aldar Properties are among the developers leading this shift.
“While the conflict adds urgency, the diversification into recurring income is better understood as a long-term strategic evolution rather than a reactive pivot,” said Aziz Al Sammarai, Assistant Vice-President/Analyst at Moody’s Ratings Corporate Finance Group.
“That said, we would expect the current environment to further reinforce this direction,” he added.
Following the 2007–2008 crisis, which exposed the risks of relying on off-plan sales and high leverage, leading developers pivoted to a develop-to-hold model. In the post-Covid era, they expanded into income-generating assets across retail, logistics, education and commercial real estate. This reduces reliance on cyclical sales, improves earnings visibility and IRR, and makes the sector more attractive to investors seeking steady yield over speculative returns.
Emaar’s recurring revenue portfolio, comprising malls, hospitality, entertainment and commercial leasing, generated more than AED 8 billion ($2.2 billion) in EBITDA in 2025.
Aldar has invested AED 4.9 billion to expand its develop-to-hold recurring income portfolio, with approximately AED 20.1 billion of such projects still in its development pipeline.
Credit buffer
Recurring income portfolios serve as an important credit buffer for the developers.
“We view this portfolio as a key credit strength, providing a meaningful financial buffer during periods of volatility in the property development cycle,” Al Sammarai said.
Recent transactions underscore the trend. UAE-based developer Arada acquired a controlling stake in Reem Hospital, an Abu Dhabi-based healthcare provider.
“[The move is] part of our long-term plan to diversify our revenue streams away from residential development, which tends to be cyclical in nature,” Ahmed Alkhoshaibi, Group CEO of Arada, told Zawya.
Last week, privately owned SRG Properties, active in Dubai for more than 45 years, sold residential and community retail development in Dubai to Aldar for AED 1.1 billion.
“Decisions about whether a project is intended for sale or long-term income are typically made at the land acquisition stage,” said David Abood, Co-CEO of Cushman & Wakefield Core, which advised on the SRG-Aldar deal.
Family offices including Al Nabooda, AW Rostamani, Al Tayer, Al Futtaim, Al Shafar and Al Moosa manage large yield-generating portfolios. Smaller real estate players have also adopted this strategy to insulate themselves from cyclical downturns.
“Their long-term accumulation of income-generating assets allows them to fund new projects organically with little to no leverage,” Abood said.
Exit strategies
Currently, developers such as Emaar and Aldar are holding a larger share of these assets on their balance sheets, given their ability to generate stable, recurring income and diversify cash flows, Moody’s Al Sammarai said.
“As portfolios mature and market depth improves, partial monetization may become more attractive through partnerships with institutional investors, selective disposals, or public-market avenues,” he added.
In practice, the outcome is likely to be a mix of retention for yield, targeted disposals and the creation of standalone platforms to attract strategic or public capital, depending on funding needs, asset maturity and market conditions.
Key risk
A key risk for developers pursuing income diversification stems from the current geopolitical environment: If population inflows weaken, demand supporting sectors such as education and retail could soften.
Developers may delay plans as the situation evolves, but there is no indication that projects are being halted, Abood added.
“Even with prolonged conflict causing some delays, activity continues,” he said.
Both local developers and international investors remain committed, viewing the UAE as a long-term investment destination.
“Global capital has not pulled back, with investors confident tensions will ease and still keen to back the UAE’s growth story,” Abood said.
(Reporting by Brinda Darasha; editing by Seban Scaria)
