HSBC recently upgraded Emaar Properties to ‘Hold’ from ‘Buy’ as Dubai’s residential property market is rising, according to recent media reports. The bank stated that Emaar Properties and its property development arm, Emaar Developments are well placed to take advantage of the growth. Even Emaar Malls is expected to benefit from the Dubai Expo.
Currently, Dubai is witnessing high growth in homebuyers preferring larger villas and apartments during the pandemic despite supply concerns and hostile growth population in the region.
Stephen Bramley-Jackson, Global Head of Real Estate Research at HSBC, released a statement saying, “The globally synched post-pandemic migration to larger homes is also reigniting Dubai’s residential property market. The reported sales rebound in Dubai YTD has been remarkable.”
He further added that based on the quarterly trends, the previous two quarters have agreed on price appreciation after a multi-year period of price depreciation.
Emaar Properties offers liquidity and a share price that provide more than 90 percent correlation to property prices. Thus HSBC upgraded it from ‘Hold’ to ‘Buy’ and raised the target price from Dh3.83 to Dh5.20. HSBC upgraded despite a development pipeline bias to apartments against villas and an increase in allocation retail. The bank also upgraded Emaar Developments to ‘Hold’ from ‘Reduce’ with a target price of Dh3.89 from Dh2.51.
HSBC revised the estimates of Emaar Malls after the first quarter of 2021 and increased revenue estimates in the range of five to seven percent accelerated by the Dubai Expo. It raised the target price from Dh1.81 to Dh2.03 and kept the rating on ‘Hold’. The developer moves closer towards its highest half-yearly sales ever in the first half and 12 percent higher net profit in 2021.