Dubai-based developer Emaar is to hoping to raise $1.4bn from a sale of assets to counteract the effects of a property slump in the emirate, according to reports in the Financial Times.
The company, which is 30% owned by the government of Dubai, is looking to sell its portfolio of hotels, clinics and schools.
Mohamed Alabbar, the chairman, has briefed journalists that he is close to agreeing a sale for much of the property.
Dubai’s property market has registered a gentle decline in rental income and sale price throughout the year. The latest figures, from agent Cavendish Maxwell, in its second quarter Dubai Market Report, registered quarter-on-quarter declines of 1.1% in residential sales prices and an average 2.5% drop in rental values. The fall in residential rents was 5% year-on-year.
According to the report, annual rental declines in Dubai in the second quarter were most pronounced in International City, The Greens, Discovery Gardens and Al Furjan, which registered 12-month changes of more than 6%.
In response to the sluggish property market, Emaar’s share price has halved since its September 2014 peak, is down about 20% over the course of 2018.
Emaar has responded by seeking ways to cut costs. In March, it entered into an $8.2bn strategic partnership with Abu Dhabi’s biggest property developer Aldar, and the pair intend to create efficiencies through jointly building projects such as Saadiyat Grove in Abu Dhabi, and Emaar Beachfront in Dubai.
The company is looking to raise about $700m by selling most of its hotels, and a similar amount from its healthcare and educational facilities.
Image:Â Dubai seen from the Burj Khalifa (Simon Bierwald/Creative Commons)