Global rating agency Fitch Ratings has affirmed Dubai Holding Commercial Operations Group’s (DHCOG) long-term issuer default (IDR) and senior unsecured ratings at “AA-” (AA minus). Its short-term IDR is also affirmed at “F1+”.
The outlook on the long-term IDR remains stable. The action affects nearly Dh3 billion of bonds outstanding, said a press statement.
“The ratings reflect DHCOG’s ownership structure and strategic position in the development of Dubai as a commercial/business and tourism/leisure hub,” said the statement. Fitch’s assessment of Dubai’s creditworthiness is consistent with an “AA-” (AA minus) IDR.
DHCOG has business interests in the real estate, hospitality and leisure and telecommunications and media sectors.
The first two account for about 85 per cent of total revenues. Real estate activities are conducted through four subsidiaries – Dubai Properties, Tatweer Dubai, Sama Dubai and Tecom Investments.
Dubai Properties is the main property development arm of DHCOG.
One completed key project was Jumeirah Beach Residences, which generated revenue of Dh5.9bn in 2007. Other key projects under development include Business Bay, The Villa – a development of Spanish style villas – and Culture Village, a mixed-use development.
The main project of Tatweer is Dubailand. Included in Dubailand is the Al Bawadi project, with 31 themed hotels on a 10km stretch. Apart from Dubailand, Tatweer is also developing Dubai Industrial City. Tecom’s key activities are the operations of the free zones in Dubai.
The main zones are Dubai Internet City, Dubai Media City and Dubai Knowledge Village. Last year, DHCOG restructured its hospitality sector, Jumeirah Group, by grouping the ownership of hotels and other assets under Jumeirah Assets and hotel management services under Jumeirah Management.
Jumeirah Group has a portfolio of five owned-and-managed hotels and four managed hotels with a total of 3,090 rooms.
Jumeirah Management has entered into hotel management contracts in the Middle East, Europe, the Caribbean and Asia. These hotels are scheduled to open between 2008 and 2010. Hotel ownership will be the main driver of financial performance over the medium term.
Fitch affirms Dubai Holding unit’s stable rating