UAE Central Bank monitors 6 positive indicators in real estate sector in 2019

UAE Central Bank monitors 6 positive indicators in real estate sector in 2019

ABU DHABI, 6th October, 2020 (WAM) -- In 2019, the UAE’s real estate sector achieved six positive indicators despite the economic slowdown in the Gulf Cooperation Council, GCC, and the Middle East, highlighted by a surge in asset revenues, ownership rights revenues and profits in various indicators monitored by the Central Bank of the UAE.

The companies, Emaar and Aldar, dominate the real estate sector, representing around 46 percent of the total value of the market, which comprises 13 companies.

A recent report by the bank showed that the sector’s profitability is generally good, mainly driven by solid profits achieved by Emaar and Aldar in 2019.

On the liquidity front, the report pointed out some indicators that showed the presence of a stable economic environment, with current liquidity being around 1.7 percent, and the sector’s debt to leverage ratio being just below 1 percent.

Another positive indicator is the interest coverage ratio, which also maintained a steady level. This ratio, which measures the ability of companies to cover interest payments with their revenues, averaged at around 4.9 percent in 2019.

The share of real estate and construction loans also increased and accounted for one-third of the total loans of companies. The growth rate of loans per annum for companies in the real estate and construction sector was 11 percent in 2019, compared to 9.8 percent in 2018.