UAE developers are steadily moving towards diversified recurring income portfolios, and this trend is likely to further accelerate amid current geopolitical tensions and heightened uncertainty in the real estate market.
Dubai’s Emaar Properties and Abu Dhabi’s Al Dar Properties are among the developers leading this change.
“Although the conflict has added urgency, diversification into recurring income is better understood as a long-term strategic evolution rather than an after-the-fact pivot,” said Aziz Al Samarai, assistant vice president and analyst in the Moody’s Ratings Corporate Finance Group.
“However, we expect the current environment to further strengthen this direction,” he added.
After the 2007-2008 crisis exposed the risks of relying on off-plan sales and high leverage, major developers pivoted to develop-to-hold models. In the post-COVID-19 era, we have expanded into income-generating assets across retail, logistics, education, and commercial real estate. This reduces reliance on cyclical sales, increases earnings visibility and IRR, and makes the sector more attractive to investors seeking stable yields over speculative returns.
Emaar’s recurring revenue portfolio, comprising malls, hospitality, entertainment and commercial leasing, generated more than AED 8 billion ($2.2 billion) in 2025 EBITDA.
Aldar has invested AED 4.9 billion to expand its recurring revenue portfolio from development to ownership, and approximately AED 20.1 billion of such projects are still in the development pipeline.
credit buffer
The recurring revenue portfolio serves as an important credit buffer for developers.
“We believe this portfolio is a key credit asset and provides a meaningful financial buffer during volatile times in the real estate development cycle,” Al Samarai said.
Recent transactions clearly demonstrate that trend. UAE-based development company Arada has acquired a controlling stake in Reem Hospital, an Abu Dhabi-based healthcare provider.
“[This move]is part of our long-term plan to diversify our revenue sources from residential development, which tends to be cyclical in nature,” said Ahmed Alkoshaibi, group CEO of Arada.
Last week, privately held SRG Properties, which has been active in Dubai for more than 45 years, sold a residential and community retail development in Dubai to Aldar for Dh1.1 billion.
“Decisions about whether a project is intended for sale or for long-term income are typically made at the land acquisition stage,” said David Abboud, co-CEO of Cushman & Wakefield Core, which advised SRG and Alder on the transaction.
Family offices including Al Nabooda, AW Rostamani, Al Tayer, Al Futtaim, Al Shafar and Al Moosa manage portfolios that generate significant yields. Smaller real estate agents also employ this strategy to protect themselves from cyclical downturns.
“Because they have accumulated income-producing assets over time, they can organically put money into new projects with little or no impact,” Aboud said.
exit strategy
Moody’s Al Samarai said developers such as Emaar and Aldar now have a larger share of these assets on their balance sheets due to their ability to generate stable recurring profits and diversify cash flows.
“As portfolios mature and market depth increases, partial monetization through institutional partnerships, selective dispositions or public market vehicles may become more attractive,” he added.
In practice, the outcome is likely to be a combination of retention for yield, targeted disposals and the creation of an independent platform to attract strategic and public capital, depending on funding needs, asset maturity and market conditions.
Main risks
The main risks for developers seeking revenue diversification stem from the current geopolitical environment. If population inflows weaken, demand-supporting sectors such as education and retail may weaken.
Aboud added that the developer may delay plans depending on how the situation develops, but there is no sign that the project will be cancelled.
“Although there have been some delays due to the prolonged conflict, operations are continuing,” he said.
Both local developers and foreign investors continue to be enthusiastic about the UAE, seeing it as a long-term investment destination.
“Global capital is not retreating, investors are confident that tensions will ease and they still want to support the UAE’s growth story,” Aboud said.
(Reporting by Brinda Darasha; Editing by Sevan Scalia)
brinda.darasha@lseg.com
