The Dubai-based developer Binghatti has pushed back against concerns raised by rating agencies over its cash position and its ability to meet upcoming debt maturities, including a $500 million sukuk due in February 2027.
Speaking to Bloomberg, Muhammad BinGhatti, chairman of Binghatti Holding, said rating agencies only provide a “snapshot” of a company’s financial position at a given point in time, and that real estate remained a “cash volatile business” given the timing of project handovers and land acquisitions.
“Since June, since our figures were published, we’ve handed over three projects worth Dh1.8 billion. These projects were more than 90 per cent sold and 90 per cent collected,” he said, adding that the company holds Dh10.6 billion in cash in its escrow accounts.
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In August, Moody’s Ratings reprotedly placed Binghatti Holding’s ratings on a review for downgrade based on a deterioration in its liquidity profile and the uncertainty surrounding the timing and generation of cash flows over the next 12-18 months.
BinGhatti said the developer remained “very committed” to completing 10 projects within the next four to five months, collectively worth Dh7.5 billion. He said these projects were 94 per cent sold and around 80 per cent collected on average.
“I can confidently say that we’re in a very good position to pay back all our dues,” he said.
No major price discounts, but more flexible payment plans
Asked whether developers had been offering discounts to buyers amid regional uncertainty, BinGhatti pointed to greater flexibility on payment plans and perks such as Dubai Land Department (DLD) fee waivers over the summer.
“We haven’t really seen a drop in prices per se, not a considerable one, maybe some summer offers,” he said, adding that there had been some softening in activity between March and May before a pickup in subsequent months.
BinGhatti described the Dubai property market as having moved through three distinct phases so far this year.
January and February saw what he called an “exceptional” performance, with the market registering around Dh70 billion in transactions each month and 17,000 transactions in each of the two months.
This was followed by a period of geopolitical shock, during which monthly transactions fell from around 14,000 in March to 10,000 in May as buyers paused and reassessed.
From June onwards, BinGhatti said the market entered a recovery phase, with transactions climbing back to around 14,000 per month and monthly transaction values rising from roughly Dh29 billion in May to Dh33 billion in June and about Dh35 billion in July.
He noted that March recorded the highest transaction figures for that month on record, according to DLD data, despite the regional conflict, and that the usual summer slowdown did not materialise this year.
Demand led by local and Indian buyers
BinGhatti said the majority of demand continued to come from local buyers, alongside strong interest from India, the UK and Europe.
On the company’s project pipeline, BinGhatti pointed to its branded developments – Bugatti Residences, Mercedes-Benz Places and Burj Binghatti Jacob & Co Residences – as nearing completion.
During the interview with Bloomberg, he also cited mainstream projects including Binghatti Hills and Binghatti Hillviews, each with a gross development value of around Dh2 billion, and Binghatti Skyrise in Business Bay, worth Dh5 billion and more than 90 per cent sold.
Responding to suggestions that rating agencies and analysts may be underestimating the amount of cash tied up in the development cycle, BinGhatti said escrow account balances were the best measure of a developer’s financial health.
“We like to say keep your luminary coin for your dark days, and that’s exactly what we’ve been doing,” he said, adding that the company had accumulated more than Dh10 billion in its escrow accounts and was not solely reliant on those funds, given the additional Dh7.5 billion expected from the 10 project handovers.
Source: Khaleej Times