Dubai's developers facing ratings cut

One of the Middle East's leading developers is facing a cut in ratings along with five other Dubai based companies, it has been revealed...

Emaar Properties is one of six companies under review by leading credit agency Moody's Investors Service. Moody's said it made the decision based on a deterioration of Dubai's broader economic outlook.

It is the second ratings blow for state owned Emaar. In December ratings agency Standard & Poor's revised the company's outlook from stable to negative.

The other companies listed by Moody's are global port operator DP World, Dubai Holding Commercial Operations Group, utility operator Dubai Electricity & Water Authority, trade zone and industrial park operator Jebel Ali Free Zone, and DIFC Investments, an arm of the emirate's four-year-old international financial Centre.

Dubai has been hit harder than other economies in the region because of its higher debt load, relatively limited cash resources and a reliance on business sectors that can be hurt by the economic downturn, the rating firm said.

Philipp Lotter, senior vice president in Moody's corporate finance group, said that Dubai's fairly open and globally integrated economy has made it more susceptible to the world's financial shock waves.

'It is a reflection of a weaker environment that has affected Dubai like all open economies,' he said.

The warning for Emaar comes at a time when property companies are struggling. They are delaying and cancelling projects, cutting jobs and looking at ways of trimming costs.

There are reports that contractors are not being paid on time and concerns that even more jobs related to the real estate industry could go.

Source: www.propertywire.com