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Emaar Properties plans to invest AED 65 bn in its operations and assets over the next five years, with the annual capital spending ranging between AED 7-11 bn in 2025-26 without land acquisitions, according to an S&P Global report. The company also aims to spend over AED 30 bn on expanding its land bank. It also intends to inject capital into its residential rental portfolio to boost the share of more stable revenue.
Which projects will lead the spending? The real estate developer is expected to spend over AED 14 bn toward its Creek Tower and Creek Mall developments. Emaar is also increasing its investment in the Dubai Mall’s expansion project, initially announced at AED 1.5 bn, as part of its strategy to capitalize on strong retail demand and nearly 99% occupancy rates at the end of 2024. It is also planning to open 18 more hotels in the UAE and other international locations, with three-quarters to be added under management agreement over the next five years, S&P Global said.
On the other hand, the developer is expected to tamp down on investments in international real estate development, which will see “modest growth” over the next two years.
REMEMBER- Emaar partnered with Midar Investment to set up the AED 7.3 bn New Mivida residential project in Egypt’s New Cairo, with an initial investment of USD 80 mn. It is also building four hotels and a new project with Saudi’s Public Investment Fund (PIF) in Saudi Arabia and might be taking part in Indonesia’s USD 33 bn capital city project. In Dubai, it is also planning to launch two AED 96 bn luxury developments and a new residential community.
DCF expansion might be limited by current plans: Emaar plans to distribute 100% of its share capital as dividends for 2024 and the following years, with payouts totaling AED 8.8 bn for last year. Dividend distributions are projected to rise to AED 10-12 bn in 2025-26. Combined with its annual capital investments, this will limit discretionary cash flow expansion despite expectations of higher EBITDA.
ICYMI- Emaar Properties saw its net income before tax rise 25% y-o-y to AED 18.9 bn in 2024, its highest-ever net income. The company also recorded its highest-ever revenue with a 33% y-o-y increase to AED 35.5 bn, and its highest sales at AED 70 bn, up 72% y-o-y.
The company received an upgraded rating of BBB+ from S&P Global, which cited its significant growth in Dubai and the steady performance of its malls, hospitality, and entertainment businesses.
