Dubai’s strong economy will likely support property prices in 2022 – S&P Global Ratings

Published: 03/23/2022 12:51 GMT
S&P Global Inc (SPGI) – 2022 should offer moderate increases in prices and rents as well as strong sales, which will encourage developers to continue launching new projects.
Developer revenue growth is expected to accelerate over the next 4-5 years, tempered by a structural oversupply of residential properties and the delivery of new developments.
High oil prices will remain an important positive factor for investor sentiment in the GCC region.
Pressure on profitability will ease and S&p adjusted debt to EBITDA will improve as EBITDA increases.
New, working capital-intensive projects will limit this deleveraging for some, while rising interest rates will affect capitalization rates and weaken loan-to-value ratios.
Rising energy prices and cost inflation will cause companies to focus on profitability.
Developers are somewhat shielded from the impact of higher short-term raw material costs, which are borne by contractors.
Some companies may consider disposals of non-core assets as valuations rise.
Geopolitical tensions and their economic fallout are a major risk, but we expect Dubai to attract interest as a haven for the wealthy.
The introduction of corporate tax in the United Arab Emirates is considered a manageable risk in the medium term, with no cash impact before 2024.
Cash inflows will remain strong in 2022, supported by a strong pipeline of projects to be delivered during the year.
Income should be $2.92 billion
Adjusted EPS should be $3.08

Revenue forecast for the next quarter expected to be $3.18 billion
Next quarter EPS guidance should be $3.51

More details on our Analysts page.