Standard & Poor's Ratings Services said today that it had lowered its long-term corporate credit rating on Dubai-based property developer Emaar Properties PJSC to 'BBB+' from 'A-'. The outlook is negative.
"The rating action reflects the continued weak real estate markets in Dubai, and our increased uncertainties about the depth of the downturn and the pace of eventual recovery. The weak markets are negatively affecting our view of Emaar's business risk, and are likely to weaken Emaar's currently healthy financial position in the near to medium term," said Standard & Poor's credit analyst Alf Stenqvist.
The ratings on Emaar continue to reflect the group's important role and strong position in the Dubai property development market and its close relationship with, and 32% ownership by, the government of Dubai (not rated). The rating includes a two-notch uplift from the stand-alone assessment to reflect implicit government support. The ratings also reflect the group's current healthy financial position, low debt leverage, and strong asset base. The main constraining rating factors include the inherent risks in the cyclical property development industry and the group's large exposure to the weakening of the Dubai real estate market.
the slow down seem that it will not end any time soon and by this rate many many real estate developers would have gone bankrupt.
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