#Dubai Real Estate Firms Reassure Investors as Bonds Slip Into Distress - Bloomberg

Dubai Real Estate Firms Reassure Investors as Bonds Slip Into Distress - 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.

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.

Earlier this month, Emaar Properties PJSC — the developer of the Burj Khalifa, the world’s tallest tower — also reached out to investors, some of the people said. The firm’s shares are down about 28% since the conflict began, under-performing Dubai’s benchmark, which has fallen around 17%.

The moves reflects a rapid shift in sentiment. Dubai’s real estate market 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.”

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.

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.