Abu Dhabi builders face fewer problems than Dubai's
Abu Dhabi
ABU Dhabi real estate companies will face less severe headwinds from the double whammy of the coronavirus pandemic and lower oil prices than those in neighbouring Dubai, Moody's Investors Service said.
Residential oversupply isn't as pronounced in Abu Dhabi, which supports the credit quality of Aldar Investment Properties and Emirates Strategic Investment Co, Moody's analyst Lahlou Meksaoui wrote in a note on Monday.
In Dubai, job losses, salary cuts and travel restrictions are slashing demand for new property.
"The economic contraction and its fiscal implications will be most acute in Dubai, where the economy is very reliant on tourism and transportation," Mr Meksaoui wrote.
Still, there will be a credit-quality erosion of real estate companies in the United Arab Emirates, he said.
A NEWSLETTER FOR YOU
Property Insights
Get an exclusive analysis of real estate and property news in Singapore and beyond.
As the coronavirus wreaked havoc on the global economy, it also aggravated Dubai's property slump where oversupply has pushed prices lower for the past six years.
Now, with companies like Emirates airline laying off staff and some estimating Dubai's population could shrink by 10 per cent, the downturn is likely to further reduce rents and the value of homes.
Gross profit margins of builders like Emaar Properties PJSC will continue to weaken, Moody's said. BLOOMBERG
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Property
After S$160 million makeover, SingLand eyes better take-up, higher rents at Singapore Land Tower
US renters seeing chance of owning a home at record low: NY Fed survey
Shenzhen eases home buying to revive sales in China tech hub
Far East Orchard looks to sell Rendezvous Hotel Perth Central for A$18.5 million
Lendlease Global Reit’s committed portfolio occupancy rises to 88.8% in Q3
No bids for Pine Grove’s mega en bloc sale at S$1.95 billion price