Despite broader market weakness and lower pre-sales, execution and cash flow remain robust and supportive of valuation; reiterate Buy on ED and EP

Research evidence excerpt

Equity Research

10 August 2026 | 8:42AM GST

EMAAR GROUP

Despite broader market weakness and lower pre-sales, execution and

cash flow remain robust and supportive of valuation; reiterate Buy on

ED and EP

LTM performance and what the market is pricing in?

Emaar Properties is down 15% YTD/26% since the onset of the conflict, reflecting

concerns that regional geopolitical tensions could weigh on tourism (affecting its

hospitality and retail businesses) and investment (impacting residential sales) for

longer. Indeed, as of 1H26, retail sales at Dubai Mall are down c. 13% yoy and

pre-sales for Emaar Development are down 45%yoy. However, when we look at the

current valuation, the market appears to be pricing Emaar Development based only

on the existing cash on its balance sheet and a discounted NPV of cash from existing

launches, but not the value of its land bank/monetization potential through new

launches. For Emaar Properties, we further note that the valuation implies a cap-rate

of 10%-21% for its recurring revenue business, which is now trading at an implied

market cap (after stripping out the market cap of Emaar Development and Emaar

Misr) of AED59bn vs a peak of AED90bn in 2025. We see valuation as extremely

conservative for both entities, assuming a very low probability of recovery in tourism

and investment. Given the current backlog in the development business and stable

recurring revenues, the impact on near-term earnings should be limited. We believe

the recent share price underperformance effectively captures the downside risk to

earnings, assuming that pre-sales decline to AED25bn per year over the next few

years, versus our base-case assumption of AED40bn on average. In our view, this

indirectly reflects a market expectation that overall transaction activity will settle at

around 70% of pre-conflict levels, with weakness particularly pronounced among

overseas investors, who account for approximately one-third of total buyers.

Harsh Mehta

+971(4)376-3405 |

Goldman Sachs International

Vaishnavi Gupta

+1(332)245-7817 |

Goldman Sachs India SPL

Swarnilee Patra

+1(332)245-7700 |

Goldman Sachs India SPL

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