Dubai ruler tightens grip on Emaar in US$6.5 billion reshuffle

[DUBAI] A firm controlled by Dubai’s ruler has emerged as the top shareholder in the city’s biggest developer after buying a US$6.5 billion stake from the emirate’s main investment vehicle.

Dubai Holding has acquired a 22.27 per cent stake in Emaar Properties from the Investment Corporation of Dubai, in a deal that comes as the city’s property market contends with uncertainty tied to the Iran war.

Dubai Holding will now control 29.73 per cent of Emaar, which helped develop the Burj Khalifa.

The transaction effectively shifts ownership of one of Dubai’s most prized corporate holdings from one state-linked entity to another, tightening the ruler’s grip over a company central to the emirate’s economic rise.

It also lands at a delicate moment for Dubai’s housing market, with prices beginning to edge lower for the first time since a post-pandemic boom.

Financial details of the transaction weren’t disclosed, though a 22.27 per cent stake in Emaar is worth about 23.9 billion dirhams (S$8.3 billion) as of Monday’s close. Shares in the firm have led declines on the Dubai bourse since the conflict began, giving up some gains after a years-long rally. 

“We view this as a government-level restructuring rather than a commercial transaction, as the ultimate ownership remains within the Dubai government,” said Marlene Milad, an analyst who covers the company for CI Capital. “Nevertheless, timing may reflect a more defensive consolidation amid regional uncertainty.”

The transaction further strengthens Dubai Holding’s position as a key real estate platform, which includes state developers such as Nakheel and Meraas, she added. 

Dubai Holding said that the acquisition reflects its confidence in Emaar’s market position, asset base and long-term growth prospects, as well as the resilience of the emirate’s economy and real estate sector.

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Owned by the emirate’s ruler, Sheikh Mohammed bin Rashid Al Maktoum, the conglomerate has investments in more than 30 countries and assets worth more than 500 billion dirhams across sectors including real estate, hospitality, entertainment, retail and media.

The latest consolidation comes two years after state-owned developers Nakheel, best known for Dubai’s palm-shaped artificial islands, and Meydan were brought under Dubai Holding.

Emaar’s portfolio includes some of Dubai’s best-known developments, including the Burj Khalifa, Dubai Mall and large master-planned communities across the emirate. 

The firm has benefited from Dubai’s status as a tax-free haven, which has helped draw expatriates and foreign capital to its property market. That influx has helped home prices surge more than 70 per cent higher from 2020. BLOOMBERG