Emaar Malls Group gets stable outlook
Dubai, June 3, 2014
Moody's Investors Service has assigned a first-time provisional (P) Baa2 issuer rating to Emaar Malls Group (EMG) with a stable outlook.
EMG is a wholly-owned subsidiary of Emaar Properties (Emaar Group, Ba1 stable) and was established in 2005 in order to develop and operate the group's retail business.
The company manages a total gross leasable area (GLA) of approximately 548,000 sqm in Dubai, with a total GLA occupancy of 93 per cent as of December 31, 2013.
"The provisional (P) Baa2 rating we have assigned to Emaar Malls Group reflects the company's robust business profile, with mature assets that have high occupancy rates and provide stable recurring cash flows," remarked Rehan Akbar, an analyst in Moody's Corporate Finance Group.
"The rating is underpinned by the success story of Dubai Mall, a popular tourist attraction in its own right, albeit one with geographic and asset concentration risk," he stated.
The issuer rating is provisional subject to confirmation of certain property titles being transferred from the parent company to EMG on a non-cash basis.
EMG's rating reflects the company's well-established position in the retail leasing business, with high quality assets, that in Moody's view will remain fairly robust during an economic downturn.
The rating is underpinned by the strength of EMG's flagship asset, the Dubai Mall, which has over 1,000 leasable units covering over 340,000 sqm of GLA.
Since its first full year of operation in 2009, Dubai Mall has seen an impressive increase in footfall at a compound annual growth rate of 25 per cent, receiving 75 million visitors in 2013 while the occupancy rate reached 99 per cent.
The other assets include two outdoor retail strips (in Downtown Dubai and Dubai Marina), a specialty mall (Gold and Diamond Park), an entertainment and dining destination (Souk Al Bahar), as well as several neighborhood retail developments, including Dubai Marina Mall.-TradeArabia News Service