Fitch Rating has affirmed Emaar Properties PJSC's (EP) Long-Term Issuer Default Rating (IDR) at 'BBB'.

The Outlook is Stable. Simultaneously, Fitch has withdrawn all the ratings.

The affirmation of EP's rating is supported by robust operations, with notable revenue and EBITDA expansion across all divisions in 9M25. Key rating strengths include Emaar Development's (ED) solid order book, offering substantial revenue visibility for four to five years. Also, strong performance from EP malls and an expanding international development division contribute positively to the rating.

EP's ratings have been withdrawn for commercial reason. Accordingly, Fitch will no longer provide ratings or analytical coverage for EP.

Key Rating Drivers

Strong Business Profile: EP ranks among the largest property and real estate conglomerates in the Gulf Cooperation Council (GCC) region, benefitting from a robust, internationally recognised brand. The company focuses primarily on constructing and marketing residential real estate, but also retains ownership of assets in the retail, leisure and other sectors, which it either leases or manages. These properties generate stable, recurring income, offsetting the more volatile nature of its residential-for-sale business.

Analytical Approach: Fitch rates EP on a consolidated basis, considering the varied risk profiles and debt capacities across its diverse businesses. The investment portfolio provides a foundation for the group's overall debt capacity. Fitch allocates debt to ED to align with an investment-grade risk profile, and the remainder to Emaar Malls Management LLC (EMM). The latter benefits from a higher debt capacity due to its stable, recurring rental-generating property EBITDA, allowing for a comparison of debt/EBITDA metrics with its EMEA peers.

Applying this approach to the consolidated group's net cash position at end-2024, our analysis prioritises debt capacity for the investment property portfolio, measured by Fitch-calculated gross debt/mall rental-derived EBITDA (end-2024: 2.5x; end-2023: 3.5x). ED's residential-for-sale and international property development divisions, which are more volatile by nature, have a lower debt capacity. ED was the largest contributor to consolidated revenue and EBITDA in 2024.

Solid EMM Performance: EMM owns and operates 37 malls and other assets with a gross leasable area of about 10.5 million sq ft. In 2024, EMM achieved AED5.1 billion in revenue, up 6% over 2023, driven by a 7% rise in tenants' sales. Operating performance is supported by high occupancy (9M25: 98%) and tenant retention, benefitting from an average lease expiry term of 3.2 years. The Dubai Mall, the large flagship asset that generates about 85% of EM's recurring EBITDA, benefits from its strategic location and luxury offerings, and a planned AED1.5 billion extension to add 240 luxury stores and dining options. Dubai Hills Mall complements the portfolio, with over 99% occupancy.

Robust Property Market: Dubai's residential market had strong momentum in 2025, supported by population growth and sustained buyer demand. Total residential transactions reached about 200,779 in 2025, up from 168,968 in 2024, with total value around AED541.3 billion, up nearly 27% year on year (yoy). Offplan sales dominated activity, recording about 149,290 transactions and AED448.1 billion in value, representing roughly 69% of volume and 65% of value. Volumes during 2Q25-3Q25 hit record levels, with offplan shares near 70%. Developers maintained a high level of launching activity, with more than 100,000 units announced or in early construction stages during 2025.

Positive Residential Sales: EP reported group property sales of AED61 billion in 9M25, up 22% yoy, supported by good demand across flagship master plans, including Dubai Creek Harbour, Dubai Hills Estate, Rashid Yachts & Marina, The Valley and Grand Polo Club and Resort. ED launched 33 new projects and recorded AED52.9 billion in UAE property sales (+10% yoy), with revenue rising 41% to AED17.6 billion. ED's sales backlog increased 44% to AED120.4 billion, indicating healthy prospective revenue at healthy margins.

Ample Leverage Headroom: We anticipate that leverage headroom will remain substantial to 2028, with Fitch-calculated gross debt/malls-derived EBITDA averaging 1.6x and net cash. EP's gross debt was AED9.7 billion at end-2024 (2023: AED12.3 billion), and we expect it to decline further over the next four years. In 2024, 66% of gross debt was UAE-based (primarily sukuk), with the remainder held by EP's international subsidiaries in countries, such as Turkiye, Pakistan and India.

Peer Analysis

EP's diverse business portfolio as conglomerate is similar to that of Majid Al Futtaim Holding LLC (MAF; BBB/Stable), with mall leasing and homebuilding as key businesses. EP's conglomerate structure differs from most EMEA real-estate rate peers as it has various international property projects, unlike London-focused The Berkeley Group Holdings plc (BBB-/Stable) and Spanish-based AEDAS Homes, S.A. (BB-/Rating Watch Negative). EP is the largest master developer in Dubai. Similarly, Abu Dhabi-based Aldar Properties is the largest property company in Abu Dhabi, with master communities of villas and townhouses.

EP's and Aldar's focus on homebuilding, which is an inherently volatile sector, sets them apart from MAF, which has only a small development business. EP's and Aldar's homebuilding businesses operate as master builders locally and internationally, with a focus on large community projects, operating different business models from EMEA homebuilder peers, such as AEDAS Homes, Via Celere Desarrollos Inmobiliarios, S.A.U. (B+/Stable) and The Berkeley Group.

EP, through its mall business, has similar geographical and asset concentration risks to MAF and Aldar, with Dubai Mall generating about 85% of EM's recurring EBITDA, while MAF's Mall of the Emirates is the single largest contributor to the group. Aldar owns the 2.5 million sq ft Yas Mall, the third-largest mall in the UAE.

Corporate Rating Tool Inputs and Scores

Fitch scored the issuer as follows, using our Corporate Rating Tool to produce the Standalone Credit Profile (SCP):

The business and financial profile factors are assessed (in the format of the 'assessment', followed by relative importance) as follows: Management ('bbb', moderate), Sector Characteristics ('bbb-', moderate), Market & Competitive Positioning ('a-', moderate), Diversification and Asset Quality ('bb', higher), Company Operational Characteristics (bbb', moderate), Profitability ('a-, moderate), Financial Structure ('aa', moderate) and Financial Flexibility ('a-', moderate).

The quantitative financial subfactors are assessed based on standard financial period parameters of 20% weight for the historical fiscal year 2024, 40% for the forecast year 2025 and 40% for the forecast year 2026.

The Governance assessment of 'Good' results in no adjustment.

The Operating Environment assessment of 'bbb+' results in no adjustment.

The SCP is 'bbb'.

RATING SENSITIVITIES

Rating sensitivities are no longer relevant as the rating has been withdrawn.

Liquidity and Debt Structure

EP's liquidity at end-1Q25 was ample, comprising AED25.5 billion of cash (net of AED32.9 billion held in escrow accounts) and AED7.4 billion committed undrawn revolving credit facilities. Fitch restricts cash deposited in escrow accounts, which represents advances from customers for the purchase of properties under development. Over the past five years to end-March 2025, EP has reduced its gross debt to AED9.6 billion (2019: AED23.8 billion). We expect EP to maintain its net cash position over the next 24 months.

Issuer Profile

EP is a Dubai-based real estate operator owning a core rental producing property portfolio and an established homebuilding business specialised in developing master-plan communities within the UAE.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS

Click here to access Fitch's latest quarterly Global Corporates Sector Forecasts Monitor data file which aggregates key data points used in our credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included.

Climate Vulnerability Signals

The results of our Climate.VS screener did not indicate an elevated risk for EP.

ESG Considerations

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.

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