S&P Global Ratings downgraded Damac Real Estate Development Ltd.'s issuer credit rating to B+ from BB-, citing expectations that the company's credit metrics will deteriorate over the next two years amid falling residential real estate prices in Dubai.
The rating agency also expects the Dubai-based property developer to maintain cash flows from existing properties under development and cash released from escrow accounts, noting that the company has presold more than 80% of projects scheduled for delivery in 2019.
The ratings outlook, which was revised to negative from stable, takes into account Ratings' opinion that Dubai's residential real estate market conditions will see continued weakness, which could result in a substantial decline in Damac's new sales and margins.
