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UAE real estate companies hit by COVID-19, oil prices - Moody's

UAE real estate companies hit by COVID-19, oil prices - Moody's
The COVID-19 impact will be less severe on Abu Dhabi's real estate sector

UAE - Mubasher: The coronavirus (COVID-19) outbreak and lower oil prices will have a heavy impact on the credit quality of the UAE's real estate companies, Moody's Investors Service said in a report.

In Dubai, the real estate sector will be the most-affected by COVID-19, as job layoffs, salary cuts, and travel restrictions reduce local and international buyer demand for new properties.

The credit agency referred that the gross profit margins of homebuilders such as Emaar Properties will continue to weaken.

"The economic contraction and its fiscal implications will be most acute in Dubai, where the economy is very reliant on tourism and transportation," said analyst, Lahlou Meksaoui.

On the other hand, the COVID-19 impact will be less severe on Abu Dhabi's real estate companies with less imbalance between supply and demand, supporting the credit quality of Aldar Investment Properties, Aldar Properties, and Emirates Strategic Investment Company.