UAE property developers bank on huge order backlogs

May 29, 2025, 7:52 AM

Emaar’s project backlog – the value of the under-construction properties it has sold off-plan – totals AED100bn

Sustained momentum in sector
Revenue from off-plan sales
High profits for next two years

The UAE’s largest property developers are likely to post rising profits in the coming quarters as under-construction projects reach new milestones.

This will enable them to book revenue from their vast order backlogs, analysts predict.

Most listed developers reported big year-on-year increases in first-quarter profits. Emaar Properties’ Q1 profit rose 27 percent to just over $1 billion while its subsidiary Emaar Development reported a 48 percent jump to $523 million.

Abu Dhabi’s largest developer, Aldar Properties, made a first-quarter net profit of $446 million, up 25 percent versus the prior-year period. Only Dubai’s Union Properties posted declining earnings.

“The results from Emaar and Aldar highlight the sustained momentum in the local real estate sector,” says Nikhil Mishra, a senior research analyst at Abu Dhabi’s Al Ramz Capital.

Indarpreet Singh, assistant vice president for research at Bahrain’s Sico Bank, says the rising profits are a result of developers recognising revenue from earlier off-plan sales.

Emaar’s project backlog – the value of off-plan properties it has sold that are under construction – totals AED100 billion ($27 billion). Aldar’s is AED55.7 billion.

“Given the strong backlogs and continued growth in off-plan sales, the companies should continue reporting strong results for the next few years,” says Singh.

Real-estate companies’ profitability reflects both a resilient market and “the effectiveness of each company’s strategy, diversification, operational efficiency and a focus on premium and mixed-use developments”, says MR Raghu, CEO of Marmore Mena Intelligence in Kuwait.

ValuStrat’s Dubai residential price index reached a record high of 214 points in April, up 1.6 percent on March and 25 percent higher year on year. The index has surged from 100 in January 2021, indicating prices have more than doubled.

The ValuStrat quarterly Abu Dhabi price index rose 2.1 percent in the first quarter versus the final three months of 2024. It was up 7.2 percent annually.

“Two key risks could potentially disrupt the current real estate cycle,” says Mishra. “In the short term, geopolitical tensions or broader macroeconomic headwinds may dampen buyer sentiment and impact demand.

“Over the medium term, a surge in residential supply could put downward pressure on prices, particularly as the secondary market becomes increasingly saturated. This oversupply may also weigh on primary market demand, as buyers are presented with more competitive resale options.”

Developers’ stock price performance has been relatively muted this year, despite rising profits and UAE equity markets shrugging off April’s Trump tariff shock.

Emaar Properties’ shares were up 5.1 percent to May 26, while Emaar Development’s stock has fallen 2.6 percent over the same period.

“I would look at Emaar from a dividend visibility perspective,” says Ahmed Kamal, portfolio manager at Azimut Middle East in Dubai. “Emaar Properties provides better visibility, with recurring income lines of businesses such as malls, hotels and entertainment.”

Last year Emaar pledged to double its annual dividend payout to at least AED1 per share from 2024 onwards.

“Emaar Development is a pure exposure to development business cyclicality and as such it doesn’t have an established dividend policy,” says Kamal.

“That means there’s lower visibility on dividends until the company makes progress in its build-to-lease business.”

Emaar Properties and Emaar Development trade at trailing price-to-earnings ratios of 8.3 and 6.5 respectively. Aldar’s PE ratio is 11.3, making it the second most expensive listed UAE developer by this metric.

“Aldar is trading at more expensive multiples than Emaar as investors to an extent value their dominant status in Abu Dhabi, its higher recurring income contribution compared with Emaar and the growth potential that might come from merging some assets owned by Mubadala,” adds Kamal.