S&P: Emaar outlook negative

Standard & Poor's said it revised the outlook on Emaar Properties PJSC to negative from stable and affirmed its A- long-term corporate credit ratings.

"The outlook revision reflects a rapid weakening of the real estate markets in Dubai and our uncertainties about the depth of the downturn and the pace of eventual recovery. A prolonged downturn could negatively impact our view of Emaar's business risk, and it could also lead to deterioration in Emaar's currently healthy financial position," S&P analyst Alf Stenqvist said in a statement.

Ratings 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 agency said.

The rating includes a two-notch uplift from the standalone assessment to reflect support from the government of Dubai. The rating also reflects the group's current strong cash flows, low debt leverage and strong asset base, the agency said.

Constraining rating factors include the weakening of the Dubai real estate market, the concentration of the group's operating cash flows in a relatively small number of large projects and the group's aggressive geographic expansion into markets with higher political and economic risk, S&P said.

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