Coronavirus spread to Middle East hits UAE’s biggest developer

Emaar Properties depends heavily on tourism, including from China and Iran

National /
Feb.February 29, 2020 02:00 PM
The Burj Khalifa with Emaar Properties chairman Mohamed Ali Alabbar (Credit: LConstantino via Wikipedia)

The Burj Khalifa with Emaar Properties chairman Mohamed Ali Alabbar (Credit: LConstantino via Wikipedia)

The real estate industry is starting to feel the impact from the growing coronavirus threat, and Dubai’s biggest developer is no different.

Shares in Emaar Properties PJSC — builder of the world’s tallest tower, the Burj Khalifa — fell 10 percent this week after 230 cases of the virus were confirmed in the Middle East, according to Bloomberg. The company’s subsidiaries have also taken hits.

The virus’ spread, or rather the measures to contain the spread of the virus, have some Chinese real estate companies, renters, and property owners reeling. Global real estate investment trusts, like the world economy as a whole, are also taking a hit.

Fears are impacting Europe, too. Blackstone Group, Cushman & Wakefield, Savills, Knight Frank, PGIM Real Estate and other big firms will not be sending representatives to the MIPIM property conference in Cannes after a 23-year-old woman tested positive for the virus.

The virus comes at a tough time for Emaar and the wider real estate industry in the United Arab Emirates, which has been in a prolonged slump.

Emaar owns several malls and hospitality properties in the UAE and so relies heavily on tourism. Nearly a million Chinese nationals traveled to Dubai alone last year — a 15 percent increase from 2018. The country’s air carrier Emirates suspended flights to parts of China as well as all of Iran, where at least 245 cases have been confirmed.

“[Emaar] has direct exposure to hotels and retail — where it is not just tourists, but also local residents who are cutting down on anything discretionary,” Al Mal Capital senior portfolio manager Vrajesh Bhandari told Bloomberg. “For many foreigners, the company is a proxy for the U.A.E. if not the whole of the Gulf, so if you have to sell the region, Emaar is the target.” [Bloomberg] – Dennis Lynch


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