UAE Developers Rush to Reassure Investors Wary of War Risk

A number of developers in the United Arab Emirates have held calls with investors to allay concerns over a potential liquidity crunch, a stark reversal of fortunes as the Iran war approaches the one-month mark.Author of the article:You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — A number of developers in the United Arab Emirates have held calls with investors to allay concerns over a potential liquidity crunch, a stark reversal of fortunes as the Iran war approaches the one-month mark.Subscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.Developers including Binghatti Holding Ltd. and Omniyat Holdings Ltd. spoke with investors on Wednesday as their bonds slipped into distressed territory following the conflict, according to people familiar with the matter, who asked not to be identified discussing confidential information.Others, including Sobha Realty and Arada Developments, have held similar calls since the war began, some of the people said. Debt issued by all four companies is rated below investment grade by major ratings firms, according to data compiled by Bloomberg. Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Among listed firms, Emaar Properties PJSC, builder of the Burj Khalifa, the world’s tallest tower, and Aldar Properties PJSC, Abu Dhabi’s largest developer, also reached out to investors, some of the people said.Emaar’s shares are down about 25% since the conflict began, under-performing Dubai’s benchmark, which has fallen around 15%. Aldar is down about 27% over the same period, while the Abu Dhabi benchmark has dropped around 8%.The moves reflect a rapid shift in sentiment. The real estate market, particularly in Dubai, is coming off a record rally driven by ultra-wealthy buyers who snapped up luxury villas and penthouses, pushing the emirate ahead of New York and Hong Kong in sales of homes priced above $10 million.But the UAE has borne the brunt of retaliation from Tehran since the US-Israeli war on Iran began on Feb. 28, with energy infrastructure, airports and residential and commercial buildings hit by projectiles and debris. Even so, much of the country remains operational: businesses are open, many offices have shifted to remote work, and investors continue to pursue global deals.Still, brokers have told Bloomberg News that many buyers are adopting a wait-and-see approach. Early signs suggest some are halting plans to purchase properties ahead of construction, or “off plan.”Get the Mideast Money newsletter, a weekly look at the intersection of wealth and power in the region.During the recent calls, several developers presented stress-test scenarios aimed at demonstrating liquidity resilience.Binghatti, whose call drew more than 300 investors, outlined a worst-case scenario involving a 20% decline in collections and a 30% drop in average selling prices of unsold inventory. Even under those assumptions, the company projected cash of more than 5 billion dirhams ($1.4 billion) by year-end and close to 14 billion dirhams by the end of 2027, the people said. The firm added it has seen no delays in customer payments or defaults.Representatives for Binghatti, which focuses on mid-market housing but has also pushed into luxury projects — including plans for a Mercedes-branded tower and one of the world’s tallest residential buildings — declined to comment.Omniyat also presented downside scenarios, modeling declines of more than 20% in property prices alongside higher default rates, while maintaining that its liquidity position would remain intact, according to people familiar with the matter. A spokesperson for the firm declined to comment.The ultra-luxury developer said in a separate statement on Thursday that it has a “strong liquidity position” of more than $1.4 billion in cash and equivalents, including $726 million of unrestricted corporate liquidity not subject to escrow or regulatory ring-fencing. The company said this would fully cover its $500 million sukuk maturing in 2028 without relying on property sales, buyer collections, refinancing or additional capital markets activity. Some of Binghatti’s and Omniyat’s sukuk have slipped back below the distressed threshold — trading with a yield spread of over 1,000 basis points above the risk-free rate — after rebounding on Wednesday. Ratings agencies have flagged geopolitical risks to demand and the potential for higher construction costs, with Fitch Ratings placing Binghatti, Omniyat and, more recently, Arada on watch for possible downgrades.Representatives for the Arada, co-owned by the son of Saudi Arabian Prince Alwaleed bin Talal and a member of Sharjah’s royal family, declined to comment on the call. The firm previously told Bloomberg News it had taken proactive steps to reinforce liquidity.A spokesperson for Sobha Realty confirmed the firm has held multiple investor calls, where it assured investors it has “a strong liquidity position” and that liquidity preservation remains its top priority. The developer, owned by an Indian tycoon, has also been looking to expand into the US in recent months.In response to Bloomberg News’ queries, Aldar said it told investors that its fundamentals remain strong, citing a development backlog of more than 70 billion dirhams. The developer, which is majority controlled by prominent Abu Dhabi entities, said it plans a new launch soon, and that two large communities — one in Abu Dhabi and another in Dubai — remain on track.Representatives for Emaar did not immediately respond to a request for comment.Before the war, property companies had been on a borrowing spree as they raced to secure sites for residential projects in Dubai and Abu Dhabi. Real estate bond issuance in the UAE reached nearly $7 billion in 2025, more than double the 2024 total, which was itself a record. That has created a growing wall of maturities, with about $8 billion due by 2030.(Updates with details from Aldar’s investor call and response.)Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.