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Morgan Stanley has recommended Emaar Properties when it is “overweight”, which means that the stock will outperform the benchmark or its current price.
He recommended “Emaar Development” shares at “equal weight” (hold), which indicates that the stock’s performance is in line with future expectations.
Morgan Stanley also rated Aldar Properties at “overweight” since the start of coverage of the stock, supported by growth opportunities.
Morgan Stanley expects real estate prices in Dubai to continue to rise this year – even after a 20% jump since 2020 – due to cash buyers and investors looking for returns and the reopening of China.
Prices are likely to remain high because around 80% of real estate sales in Dubai are cash-based and are therefore less sensitive to interest rates. Attractive rental yields will continue to attract investors and a rebound in Chinese investors will increase demand, analyst Nida Iqbal writes.
“We believe that the strong revenue stream of real estate developers in the UAE provides a forward-looking revenue outlook over the next 3-4 years,” Iqbal wrote. And «large land banks provide the possibility to launch more projects during the period between the next 15 to 30 years. Finally, recurring revenue streams such as retail and hospitality are benefiting from the recovery in tourism.
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