S&P Sees Tough Years for #Dubai Property, 11% GDP Crunch on Covid - Bloomberg

S&P Sees Tough Years for Dubai Property, 11% GDP Crunch on Covid - Bloomberg:

Dubai’s economy will likely suffer a “significant shock” this year as the coronavirus pandemic and its consequences weigh on most sectors in the Middle East’s business hub, according to S&P Global Ratings.

S&P also stripped the city’s best-known real-estate developer of its investment-grade credit rating. Gross domestic product in the emirate will shrink about 11% this year, and will only recover to last year’s nominal growth levels in 2022, S&P said in a statement Thursday.

S&P cut Emaar Properties and its subsidiary Emaar Malls from BBB-, the lowest investment grade, to BB+ and signaled that more downgrades may come. DIFC Investments Ltd. was also cut to BB+, though S&P’s outlook on its rating is stable.

“We now expect to see international demand for Dubai’s property to be subdued, and the fall in residential prices to be steeper than we had expected, lingering well into 2021,” S&P analysts including Timucin Engin wrote.