Emaar Properties, Dubai’s largest listed developer and the name behind iconic structures like the Burj Khalifa, is poised to generate Dh485 billion ($132.15 billion) from the sale of its development portfolio by the year 2040. The announcement comes as EFG Hermes, an Egyptian investment bank, anticipates that around Dh155 billion or 32% of Emaar’s total portfolio will be sold within the next five years.
EFG Hermes underscores Emaar’s prowess in the real estate market and its ability to maintain its market leadership due to the premium quality of its communities in Dubai. Mai Attia, Managing Director and Head of Real Estate and Construction Sector Research at EFG Hermes, emphasized the attraction of Emaar’s developments across a wide range of buyers, contributing to its continued success.
EFG Hermes predicts contracted sales of Dh35.1 billion in 2023, Dh37.3 billion in 2024, and Dh39.4 billion in 2025 for the company.
Emaar Properties has played a pivotal role in Dubai’s real estate growth, with its diversified portfolio spanning retail, residential, commercial, office, and hospitality segments. The company commands an extensive land bank of approximately 340 million square feet in Dubai, according to EFG Hermes.
The ongoing resurgence of Dubai’s economy following the pandemic-induced slowdown further solidifies Emaar’s growth trajectory. Dubai’s economy grew by 4.6% on an annual basis in the first nine months of the previous year, as reported by the Dubai Statistics Centre. Projections indicate an estimated 5% growth for the year 2023 and a forecasted 3.5% increase in 2023, according to Emirates NBD.
The emirate’s strong economic performance, combined with the successful containment of the pandemic, has bolstered its status as a prominent global economic center. The resurgence is evident in various sectors, with increased tourism and commercial activity contributing to its growth.
Dubai welcomed 8.55 million visitors during the first half of 2023, surpassing pre-pandemic levels and reaffirming its position as a major global tourism destination. Additionally, it has been recognized as one of the world’s most attractive cities for the affluent and one of the fastest-recovering cities since the Covid-19 pandemic.
The real estate market in Dubai continues to thrive, as evidenced by an 80% annual increase in total transaction value to Dh157 billion in the first quarter of the year. Total transactions during the January-March period rose by 49% to 38,715.
Emaar Properties remains a prominent player, with its June launch of “The Oasis by Emaar,” a $20 billion luxury waterfront property development project comprising 7,000 residential units, including mansions and villas. The company is estimated to hold a 25% market share in Dubai, firmly establishing its leadership.
EFG Hermes maintains a “Buy” rating on Emaar stock and has increased its target price to Dh9.50, projecting a 35% upside potential. Despite the company’s strong operational and financial performance since the latter part of 2021, its stock performance has not reflected its positive momentum from the previous year.
With a positive outlook for the company’s valuation, visibility of earnings and cash flow, and its growth profile across various segments of Dubai’s real estate sector, EFG Hermes expects the stock to re-rate in the short term and mirror the company’s attractive valuation and growth prospects.
