Dubai developer Emaar is reportedly pursuing the sale of assets worth up to $1.4bn to raise money amid a wider property slump in the emirate.
The Financial Times reports that the company is closing in on a deal with “several interest parties” to sell hotels, clinics and schools.
“This has to be about raising capital to strengthen the balance sheet,” a source told the publication. “This is not the market environment you would want to sell assets in if you were being opportunistic.”
Dubai’s property market has witnessed a slump in recent years, with recent data showing rental rates down up to 15 per cent in some areas from the second half of last year to the end of the first half of 2018.
Sales prices were also down up to 8.8 per cent in some areas during the same period, according to data from listings site Bayut.com.
Credit ratings agency S&P said in a February report that it expected Dubai’s real estate slump to continue for another two years.
Emaar, which is about 30 per cent owned by the Dubai government told the FT in a statement that it was regularly considering finance options to streamline its business.
Sources told the publication that among the assets up for sale was Emaar’s hotel portfolio, estimated to raise $700m, with the exception of two prime properties.
Clinic and school assets across the developer’s communities are expected to raise a further $700m.
Emaar’s share price is down about 20 per cent so far this year despite seeing a 8.5 per cent profit increase in the first quarter to Dhs1.5bn ($408m).
The company recorded property sales of Dhs3.9bn in the first three months of the year compared to Dhs6bn in the first quarter of 2017.