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A report by S&P Global Ratings reveals that Dubai’s property developers are expected to maintain a positive cash flow in 2023, marking four years of consecutive growth, thanks to robust pre-sales and favourable payment terms. Tatjana Lescova, Associate Director of GCC Corporates at S&P, predicts further deleveraging for Dubai-based real estate firms in 2023, as they enjoy abundant liquidity and minimal funding needs, allowing for higher capital expenditure, dividends, or acquisitions.
Despite global macroeconomic pressures such as rising interest rates, inflation, and the devaluation of emerging market currencies, Dubai’s real estate market shows remarkable resilience. The Emirate’s economy has expanded by 4.6% annually in the first nine months of 2022, and the expected population growth of 3 to 4% is set to bolster the real estate market further.
The report indicates that revenue growth for Dubai-based real estate companies will mainly stem from new and recent sales, offering good revenue visibility for the next two years after strong pre-sales in 2021 and 2022. The report further predicts a rise in developers’ profitability in 2023, despite mounting costs.