Operator: Everyone, and thank you for joining the Emaar Q3 Earnings Call 2026. My name is Molly, and I will be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two. If you have joined us online, you can submit a text question via the Q&A button on your browser. I will now hand over to your host, Rashad Kawan, to begin. Rashad, please go ahead.
Rashad Kawan: Thank you, Molly. Good afternoon and good morning, everyone. Welcome to Emaar's Q3 Earnings Call. My name is Rashad Kawan, an Equity Analyst at Morgan Stanley, and I am joined today by Pawan Chindalia, Emaar Group CFO, and Abhay Singhvi, Head of Investor Relations. Format-wise, I will pass it over to the company for some opening remarks, and then we will open it up to Q&A. With that, I will pass it over to you, Abhay.
Abhay Singhvi: Thank you, Rashad. Good day, everyone, and thank you for joining Emaar's Nine Months 2026 Earnings Call. I am Abhay Singhvi, and I am joined by Pawan, our Group Chief Financial Officer. Our Group CEO, Amit Jain, is also expected to join us shortly. Pawan will first open with an overview of the operating environment. I will then take you through our performance, and we will then open the line for your questions. Today's discussion may include forward-looking statements, which reflects management's current expectation and are subject to risks and uncertainties that could cause actual results to differ materially. Please interpret today's remarks in that context. I will now hand over to Pawan. Pawan.
Pawan Chindalia: Thank you, Abhay. Hello, everyone. Please pardon me for my bad voice today. It is a little bit under the weather. While we get started, as you are aware, we continue to operate in a very dynamic regional environment. We are monitoring the developments very closely. UAE has again shown the qualities that matter the most in uncertain periods: stability, institutional continuity, high-quality infrastructure, and a long-term economic vision. Dubai has consistent record of recovering from disruptions. After we phased new launches from March in response to regional developments, in Q3, we have seen the sales improve as we resume selected launches. Nine-month sales reached to about AED 34.7 billion at a group level, close to about AED 26 billion at UAE level, and this is measured against a strong prior year.
Pawan Chindalia: This does not reflect a structural change in demand, and it does not affect the revenue recognition we do today, which comes from our existing backlog. Our diversified model has worked as intended. Contractual base rent kept our malls growing, while hospitality and entertainment, though still below last year's level, are recovering. Hotel occupancy has improved month on month since March, and footfall continues to improve as well for our attractions. Overall, the first 9 months delivered strong earnings growth and disciplined execution, and our balance sheet gives us the flexibility to navigate near-term volatility. Before turning on to details on results, on 5 November, our board approved a voluntary cash offer of AED 15 per share for the 19.84% of Emaar Development. The offer is open, and full details are in our DFM announcement as well as on our website.
Pawan Chindalia: Given the offer period, we will limit our comments on it today to what has been announced. I will now hand over to Abhay to briefly update you about the financial performance.
Abhay Singhvi: Thank you, Pawan. To give you briefly about our 9 months financial performance, our group revenue grew by 13% to AED 37.5 billion, driven by construction progress across our UAE development backlog and continued growth in our malls and leasing portfolio, which is partly offset by lower hospitality entertainment revenue because of the lower tourism flow. Gross profit rose by 14% to AED 20.6 billion, with the gross margin steady at 55%. Our EBITDA grew by 19% to AED 19.7 billion, and EBITDA margin improved to 53% from 50%, helped by operating leverages, a higher contribution from associates and joint ventures, and cost discipline that we have put in place. Reported cost includes a one-off AED 200 million donation to our community endowment fund.
Abhay Singhvi: Profit before tax has increased by 18% to AED 19.8 billion, and net profit attributable to shareholders rose by 16% to AED 13.3 billion, or AED 1.5 per share, up from AED 1.3 per share last year. Our reported net profit includes one-off AED 135 million impairment of Storm Coaster. Coming to our sales backlog and UAE development, our group property sales were AED 34.7 billion, down 43%, primarily due to phasing of our launches and strong prior year. Q3 sales of AED 8.2 billion were 46% lower year on year, but 95% higher than the Q2 sales of AED 4.2 billion. Our revenue backlog stood at AED 158.8 billion at end of September, up 6% year on year. It includes AED 127.2 billion in UAE, giving us visibility over next 4 to 5 years revenue. Construction continued uninterrupted.
Abhay Singhvi: We handed more than 4,800 units in UAE so far, and more than 80% of active UAE projects are running ahead of the schedules. Emaar Development reported revenue of AED 22.2 billion, up 26%, and profit before tax of AED 12.5 billion, up 28%. UAE sales reached AED 26.2 billion across 14 launches, including Burj Binghatti at Dubai Creek Harbour and Alva at The Valley. Including Dubai Creek Harbour and other UAE operation, development operation, UAE development revenue rose 18% to AED 28.3 billion. Our collection remained healthy, with default rates controlled at around 1% of sales value. Coming to our recurring revenue portfolio. In our recurring revenue income, our malls, retail, and commercial leasing revenue grew by 10% to AED 5.2 billion, and EBITDA 8% to AED 4.4 billion. Even as tenant sales fell about 10%, our footfall or footfall by 12%. Our revenue remains steady, in fact, growing. Occupancy held at around 98%.
Abhay Singhvi: The work on Grand Drive expansion in Dubai Mall and Dubai Square at Dubai Creek Harbour progressing as scheduled. Hospitality, leisure, and entertainment were most affected by the lower international travel. Revenue from this segment fell by 18% to AED 2.4 billion, as UAE hotel occupancy declined to 63% as compared to 80% last year. The H1 included one-off AED 135 million of impairment on the Storm Coaster, as I explained earlier. in September, we opened Vida Aljada, the Vida branch debut in Sharjah. The performance of hospitality and entertainment assets has improved month-on-month since the onset of the conflict. In total, our recurring revenue income generated EBITDA of around AED 5.9 billion, broadly in line with last year, and 30% of our group EBITDA. Coming to international businesses. Internationally, our property sales rose by 5% to AED 8.5 billion.
Abhay Singhvi: Revenue increased by 16% to AED 1.6 billion, led by Egypt. The international backlog reached AED 31.6 billion, up from AED 20.5 billion a year earlier, supported by Marassi Red Sea in Egypt. Our balance sheet remains a clear differentiator. We ended September with AED 77.5 billion in total cash, including AED 43.8 billion in escrow, and gross debt reduced to only AED 7.6 billion after repayment of $750 million of sukuk, giving net cash of almost AED 70 billion. Debt to equity was at 0.07, interest cover was close to 31 times, and we have around AED 6.3 billion of undrawn facilities. This liquidity gives us the capacity to fund our five-year capital plan on our own and distribute announced dividend, including the one-time special dividend that we announced recently of AED 0.5 per share, totaling to AED 4.4 billion. I will now hand back to Pawan.
Pawan Chindalia: Let's open it up for questions, please.
Operator: Thank you very much. As a reminder, to ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure that your device is unmuted locally. Our first question comes from Charles Garcia at UBS. Charles, your line is now open.
Charles Boissier: Yes, thank you. Two questions from my side. The first one is, UAE defaults seem to remain still very low, around 1%, while some of your peers have referenced default rates closer to 4% on their Dubai projects. I just was wondering if Emaar's 1% figure is a nine-month year-to-date measure, or is it the current quarterly run rate? And related to it, beyond the headline number, are you seeing any signs of customer stress, through delayed installments, payment plan extension, or potentially cancellation? That's my first question. Thank you.
Pawan Chindalia: Thanks very much for that question. So, on the default, as far as UAE is concerned, it remains pretty much in control. So 1% is a number as on that date. It's not just the nine months. It actually takes into account the entire backlog which is there. So it's full reflection of the AED 158 billion backlog, actually AED 127 billion UAE backlog, plus the sales behind it. In terms of the customer payments, the customer payments continue to be very, very strong. We are not seeing any significant default, and that's what reflects in our numbers, continuing to be sub 1%. So overall, the collections are very, very strong. The customers are honoring the payments, and the cash flows continue to be very, very strong, as you have seen in our nine-month numbers.
Charles Boissier: Very clear. My second question is on the leasing at The Dubai Mall extension of AED 1.5 billion, which is due for 2028. Where does the leasing stand in term of pre-leasing ratio, and what rents and yield on cost are you targeting? And I do not know if you can also indicate for compare and contrast the rent versus the existing mall. Thank you.
Pawan Chindalia: Our malls are about 98% leased overall, the existing assets. If you talk about Dubai Mall, it is fully leased, the rental rates continue to be very, very strong. We have not reduced rates anywhere. In fact, on renewals, we are getting higher rates. We are getting increases based on the location, based on the performance of the tenant, and based on the mall. Overall, it is over on the north side. At the same time, we are conscious that we do not overstretch and make it unaffordable. Overall, the OCRs, et cetera, are pretty much in a very healthy stage. You would have seen that in the last three, four years, the tenancies increased very, very significantly, but rental increases only catches up. Overall, rentals are pretty much very, very healthy, and I think they could continue to remain very resilient.
Charles Boissier: Okay, very clear. Thank you.
Pawan Chindalia: Thank you.
Operator: Thank you very much, Charles. The line is now closed. Our next question comes from Rahul Bajaj at Citi. Rahul, please go ahead.
Rahul Bajaj: Hi. Hello, Rahul from Citi here. Two questions from my side. Thanks for taking my questions. The first one is on the Emaar Development transaction. Two-part question. One, if you could please provide us some timelines in terms of when do you expect this transaction to close? Will it be months or quarters? How should we think about it? And two, does this transaction anyway change your outlook on dividends into the next few years? Any change in that outlook would be useful to understand. That is my first part of the question. The second part of the question is on the promotional offers which some of the competitors in the market are offering on the development side. Just wanted to understand what is Emaar's view on those promotional offers and to what extent Emaar is also kind of following them. Thank you.
Pawan Chindalia: Thank you very much. I just also want to announce that we have been joined by our Group CEO, Mr. Amit Jain, as well onto the call. Thanks all for your question. On the timeline, I think the timelines are mentioned on the offer document. Now where we stand, we feel pretty comfortable that those timelines are achievable. The offer is open until 10 December, and then there is another few days of due diligence. I think since we consolidate and control Emaar Development, the due diligence will be customary and should be done very, very swiftly. In terms of dividend, I think the Emaar Properties dividend policy remains unchanged and pretty much intact, so there is no change on the policy front. On your second question, onto promotional offers, I think our previous communications, we continue to hold onto those.
Pawan Chindalia: Basically, the idea will be to make sure that we sell our inventory first and take care of our existing backlog and existing customers. We are not really after giving extremely relaxed payment plans or offers. The quality of customers and the quality of sales is far more important. Probably I relate that to the previous question where we have seen probably, from what I hear, is the 4% your colleague previously mentioned of increase of defaults up to 4%. Because of our current strategy, I think our default continues to remain very, very strong. The prices are intact, and they are well below 1%. I think our important duty first is to take care of our existing customers, and we will watch out and see the market and accordingly take the call.
Pawan Chindalia: As of now, there is no plan to change and resort to any of those promotional offers. Thank you.
Rashad Kawan: Yeah. Hey, guys. Rashad Kawan here. If I can jump in with a couple of questions, please. The first question, I guess if we just take a step back, we have seen transaction activity naturally slow down quite meaningfully in Dubai as a whole over the last couple of quarters. You guys have been quite upfront by saying you are taking a more measured approach given the uncertainties around the conflict. As we sit here today, what is your view on the supply and demand dynamics in Dubai? Hypothetically, if we get a resolution quite quickly here, do you think we can see the market going back to close to where it was kind of pre-conflict levels in terms of launches, et cetera? Or is this a bit of a necessary breather that would have ultimately happened either way as more supply comes in?
Pawan Chindalia: I think structurally, the market is pretty much intact. I think the way we see it is once the geopolitical situation settles around, Dubai will come back very, very strong. Time and again, we have seen historically, Dubai always bounces back and very, very strong, be it the 2008 financial crisis or the oil crisis of the previous decade, or after COVID. The market always comes back and very, very strongly, and I think this is our view as well for this time, that it will come very back strongly. Every time, whenever it has come back, it has beaten the previous highs. We are very, very optimistic about that.
Pawan Chindalia: Just that during this period, we need to be very, very conscious and take measured approaches around how we deal with our customers and how we build our backlog and books in terms of high-quality sales, and do not give some of the payment plans and offers that we see in the market just to get onto sales. Having said that, these sales do not have any short-term impact in terms of our P&L or cash flows. That is anyway supported next three to four years based on our backlog. I think as soon as the market returns, we are pretty much ready and always prepared for accelerating the launches. The designs are there ready, but I think the timing is very, very important, so we will watch out for that.
Rashad Kawan: Yeah, that makes sense. Thank you. If I can ask another question just on gross profit at the development level. It was down, I think, about 280 basis points year-over-year in the quarter. Can you talk through the dynamics there? Presumably, it is still early to be feeling any real increase in construction costs flowing through. Is there some sort of one-off that is driving this? More broadly, if you can just talk through what you are seeing in terms of construction costs on any new contractual awards, and whether you have had to renegotiate any existing contracts or terms, that would be helpful.
Pawan Chindalia: I think on the margins, I think this is one-off depending upon the mix of the project that is getting recognized. Overall, there is no impact on the margins. If you see 9 months ended last year versus this year, still the GP margin is close to about 55%. This is depending upon which project is getting recognized for the first time in that quarter. Sometimes the weight gets skewed as a result of that. Margins are pretty much intact because majority of our projects were already awarded, and we have fixed price lump sum contracts. The risk of price escalation largely sits outside our books. In terms of construction cost, yes, the construction cost has gone up for the newer contracts.
Pawan Chindalia: Since majority of them are awarded, the impact of those cost increase is limited to fewer projects that probably, let's say, the ones that we launched in Q4 of last year or earlier this year. That too, the impact is limited, I would say, low single digits at GP level, considering that our margins, on GP margins, are very, very strong, still upwards of 50%. Even after absorbing those cost impact, I think we remain pretty much halfway through on the overall revenue in terms of getting those margins. I think impact will be very, very limited.
Rashad Kawan: Okay. Understood. Thank you. Operator, I will hand back over to you.
Operator: Thank you, Rashad Kawan. Our next question comes from Mohamad Haidar at Arqaam Capital Limited. Mohamad, your line is now open.
Mohamad Haidar: Thank you. This is Mohamad Haidar from Arqaam Capital. Two questions as well, if I may. The first on the trend that we have been seeing over the past few years. You bought out the minorities of Emaar Malls, then the 50% stake in Dubai Creek, and now Emaar Dev. Should we expect the same for your other projects with Dubai Hills, Dubai South, Mina Rashid? Potentially, you would like to own fully your projects when it comes to developments? That is my first question, then I will ask the second one.
Pawan Chindalia: I think that would be quite premature for me to comment on any one of those. The current approval, the decisions or strategic decisions are taken at the board level, anything which probably will get decided, you will get to know over a period of time. At this stage, what was decided by the board as far as the transaction that is already in public is the only information that I have that I can share with you.
Mohamad Haidar: Understood. Thank you. Okay, moving to UAE developments. We understand your cautious approach about the market, but let us assume that the status quo continues for a while. Would you continue to adopt the similar strategy knowing that your peers are selling in the market, they are giving a few discounts, stretching the payments, but they are more active than you, so effectively you are losing market share. At which point do you think you are going to re-engage in the market, participate, if things remain as status quo?
Pawan Chindalia: Well, look, we are already participating in the market. We have had about four, five launches, five launches since March until now. As I said, we will be cautious, but at the same time, I think for us versus probably some of the comparisons that you are trying to make, important is the quality of sales. Another thing is that next three to four years backlog is there as far as our financial result is concerned. That is pretty much taken care of. We have the ability to fast-track the launches as well as award the contract and start the construction. There is always an opportunity to catch up on some of those quarters. But I think at this stage, for us, will be important to keep the inventory levels low and make sure that the prices are retained and maintained for our existing launches.
Pawan Chindalia: Make sure that our customers who have purchased into us and paid three, four years in advance, the value of their properties are maintained. I think at this stage, it is way too early, a couple of quarters. We do not want to so early jump into the conclusion and drive value downwards for our existing development and backlog. I think we will watch out for the market, as I said, and we will take measured call accordingly.
Mohamad Haidar: Thank you so much. Thank you.
Operator: Thank you very much, Mohamad. Our next question comes from Evgeny Annenkov at Jefferies. Evgeny, your line is now open.
Evgeny Annenkov: Hi. Thank you for taking my questions. I have two, please. First is on your recent board meeting that discussed the analysis requested in September. I appreciate you cannot mention specific measures, but overall, can you please disclose, is on top of the proposed transaction, there are, in principle, other substantial proposals to create shareholder value that are currently under consideration? If yes, could a potential buyback program be one of them? My second question is on your new communities. What is the expected timeline to unveil the AED 200 billion Dubai Estate community? Can you maybe start with releasing some commercial assets ahead of the residential? As for new communities, do you still reiterate the AED 30 billion to 35 billion budget for the land replenishment? If yes, do you expect any payments to be made in 2027? Thank you.
Pawan Chindalia: Thank you for your question. Whatever board has resolved in terms of proposal, that has already been disclosed, and anything other than that, which is not in public space, we may not be able to comment on that. On the new communities, the one that we had talked about earlier, I think we will again wait for the right and opportune time for it to be announced. A lot of developments are on the design stage, but I think the timing and the launch of it will be important, and you will get to know about it in due course. On the land, I think we will continue to remain opportunist on buying the land. At this stage, I think we will again take measured approach. If we get land at attractive prices which we can monetize faster, I think we will.
Pawan Chindalia: Otherwise, we will take a more measured approach in terms of buying more land.
Amit Jain: There is no payment for in 2027.
Pawan Chindalia: Yeah. There is no payment in 2027. All our land are pretty much paid.
Evgeny Annenkov: That is clear. Thank you so much.
Pawan Chindalia: Thanks.
Operator: Thank you very much, Evgeny. As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two. I will now hand back to Rashad Kawan for more questions.
Rashad Kawan: Yep. Thank you, Molly. There are a few questions here in the Q&A chat box. I will run through the ones that have not been answered. Can you provide a more detailed breakdown of your non-escrow liquidity? Is there any restriction on your ability to use fixed-time deposits, or can they be liquidated and used as cash?
Pawan Chindalia: I think we have close to about AED 33 billion of cash at a consolidated level outside the escrow. In terms of fixed deposits, we have fixed deposits, and they are pretty much accessible as and when required.
Rashad Kawan: Okay, great. Next question that we have here, has Emaar finalized any plans for its retail footprint in The Oasis villa community? Will there be a mall there? Would it be some other kind of retail format? What are plans for future launches there?
Amit Jain: The Oasis, yes, there is a mall that we are still finalizing the size of the mall and what form it is going to take. But yes, there is a mall because there is a metro that is going very near to the, or right next to The Oasis community. The launch, we have just released a few additional units in the project that we had launched earlier, which is Marèva and a few of the other units that got released after finalizing the master plan. Additional units will be released as soon as we are able to liquidate most of the inventory that we have just released, that we should be able to sell in next couple of months.
Rashad Kawan: Understood. Thank you. The next question that we have here, can you please highlight any delay in project deliveries during Q3, if any, and how you are seeing the demand mostly coming, or are you seeing the demand mostly coming from domestic buyers or international buyers?
Amit Jain: There is no project delays. Actually, most of the projects that we had launched are now gone into construction because the default levels are very, very low. So we have enough comfort that what we have sold, we will be able to collect enough money. We were holding certain of the projects where we had not collected 75% of the cost, but now most of them where we have collected more than 40%, 50%, we are now releasing for construction. So all the projects now getting into construction. Projects that were under construction, they are actually ahead in terms of the program, and there is no delays because the contractors are absolutely fine in terms of their performance. What was the second question?
Pawan Chindalia: Sir, can you repeat your second question, please?
Rashad Kawan: I think that was it from that perspective. A few other questions, I will just kind of pick through them. How much cash remains to be collected from post-handover plans from prior years?
Pawan Chindalia: It is pretty less. It is quite insignificant, 1% to 2% of our total remaining to collect.
Rashad Kawan: Okay. Are you looking to expand into other Emirates in the UAE?
Amit Jain: Again, it all depends on the opportunity. If we get an opportunity and there is a good market, yes, we will expand into other Emirates as well. Currently, Abu Dhabi looks good, but currently we do not have any plans or any transaction in negotiation or consideration in any other Emirate.
Rashad Kawan: Understood. The next question here, by 2030 or even 2032, is there a target of how much recurring EPS or EBITDA or revenue the group is targeting? Can the recurring EPS be enough to pay the one-dirham dividend?
Pawan Chindalia: I think what we had announced was that we would double our recurring income revenue, and we are on track toward that with the expansion of our retail portfolio as well as the residential leasing. I think, close to about five years from now, yeah, we should be pretty much on track to at least doubling, if not more.
Rashad Kawan: Okay, understood. The next question, what projects, presumably you have line of sight into this, what projects are first in line once the geopolitical environment improves?
Pawan Chindalia: I think we have projects across our master plans, currently about almost, we have 10 active master plans. Typically the way we do is we have launches across master plans to make sure the customers have all the options between different value propositions, be it South or Oasis or Creek, Dubai Hills Estate. When the market is back or even now, we are launching across. We recently had launch in Dubai Creek Harbour. We had launch in Emaar South as well. We will have launches across the master plan. It is not any one master plan that we focus upon. It is across the master plan that we make launches in frequency.
Rashad Kawan: Okay. There is a question here on hotel performance. I mean, you kind of alluded to it in your opening remarks, but maybe if you can talk through what you are seeing in terms of sequential improvement through the quarter, maybe not just malls, but also retail footfall in your malls as well.
Pawan Chindalia: Yes, absolutely. On the retail side, we have seen significant improvement between the quarters and month. If we see Q3, in terms of footfall, which let us say, during Q2, upon start of the conflict, was very high, double digits low, and now it has gone to single digit. The footfall has significantly come back in Q3. Similarly, in the tenancies also is low single digits compared to year-on-year. So we have seen significant improvement. In terms of hospitality, the occupancies are doubled from the lows that we had earlier during the year, close to about 70% odd. The ADRs are a bit under pressure, but still we have seen month-on-month significant improvement on that as well.
Pawan Chindalia: I think entertainment business is where, which is a little bit more impacted because of the tourism, but even there we have seen progress and improvement, albeit that is a bit slow compared to our other businesses. Just reflecting on the previous question in terms of launches, I think among the newer master plan, Dubai Estate is probably the one that we would target to unveil upon the opportune time, next in line.
Rashad Kawan: Yeah, that makes sense. Molly, I will pass it over to you to go back to audio questions.
Operator: Thank you very much. We have a question from Marios Pastou at Bernstein Société Générale Group. Marios, your line is now open.
Marios Pastou: Thanks very much, and thanks for the presentation and for taking my question. Just one remaining from my side, just on the development margin. I appreciate you mentioned that on the recent launches. I think you said there was a low single-digit margin impact. I am interested in maybe the wider backlog and thinking about if any of your contractors on your existing schemes may have tried to renegotiate pricing, or if we maybe see continued cost inflation beyond expectations, at what point you may need to renegotiate existing fixed contracts, or share that burden on cost with any of your third-party contractors. Thank you.
Pawan Chindalia: Thanks for the question. We are in constant touch with our contractors, and as I said, it is all fixed-price lump sum contracts, so it does not impact us. Even if you look at from the contractor side, it used to, pre-COVID, they used to be about mid-low single-digit margins, and post-COVID, the margins also expanded to low double digits. So, even after the cost increase, they are left with enough. The impact even on their margins is not as significant as far as our contract is concerned. So, I think we do not see any risk or reason for either them or us to negotiate the existing awarded contracts. So, probably no impact on that. And the impact on their margins, as we understand from the conversation, is less than 2% or 3% of their gross margins from our projects. So, they are pretty much in money for them to continue.
Pawan Chindalia: There is no risk on completing those projects, and that is reflected also on our revenue recognition, where you see about 13% higher overall revenue, and the development revenue is actually even higher than the overall revenue.
Marios Pastou: Okay. That is very clear. Thank you very much.
Operator: Thank you very much, Marios. As a reminder, if you would like to register a question, please press star followed by one on your telephone keypad, and if you change your mind, please press star followed by two. If you have joined us online today, you can submit a text question via the Q&A button on your browser. I will now hand back to Rashad for some more questions.
Rashad Kawan: Yep. Thank you, Molly. A few other questions here, gentlemen, that I will tick through. So, there have been a lot of commercial offices being launched in Dubai. Emaar has had success with Dubai Hills Business Park. How do you guys see this commercial office market? Does it have legs to run, and will Emaar be developing more offices as part of its recurring portfolio?
Amit Jain: Yeah, there are offices being developed. We are developing additional office buildings here in Dubai Hills also. Dubai Creek Harbour has some significant commercial development right next to the mall and the metro station. Of course, because the way we are doing the mall and one of the highest metro station that is there, we believe that is going to generate a significant demand for commercial offices there. There is one commercial development that is coming in there. We also have commercial development in Dubai Estate. We believe that commercial development, the commercial makes a lot of sense. The rentals are still pretty good. Long term, as the business starts recovering back, the demand will be extremely high.
Rashad Kawan: Okay, great. The next question here, can you update us on medium-term CapEx, and is the AED 1 per share still guided for over the next few years? With cash balances and more cash coming through from escrow, do you see room for higher payouts over the next two to three years?
Amit Jain: No, at the moment, I think we should be able to maintain the one which is guided over the next few years. If the generation is better and we have significant amount of excessive cash balance, it can go up with the approval of the board. Currently, we only envisage that at least minimum we should be able to maintain the one per share.
Rashad Kawan: Okay. Excellent. Then maybe, I do not know if you guys touched on this earlier in the call, but maybe this, and I know you guys are limited in terms of what you can say on the transaction, but if you can lay out kind of the strategic rationale in terms of kind of why now and why the structure that you are kind of proposing around the Emaar Dev deal, anything kind of you can share there would be helpful.
Pawan Chindalia: I think from a properties and development perspective, from properties perspective, basically the rationale is the full ownership brings entire UAE development business under one capital allocation framework and allows land investment, development funding, and shareholder distribution to be managed across the group. It also integrates our recurring income businesses. We have the recurring residential portfolio in development as well as properties, so it will give us an opportunity to even integrate that. Also, it removes a lot of cost and governance of separate listing. On top of that, it delivers a clear outcome for minority shareholders, offering certainty of value in cash today rather than a continued exposure of project delivery and market condition, I think. That is on the rest of the side.
Rashad Kawan: Thank you. Okay, next question that we have here. Can you advise if minority shareholders in Emaar Dev will be entitled to dividends? I guess that will depend on the deal timing.
Pawan Chindalia: Yeah, absolutely. That will depend upon timing because I think the transaction timings are much earlier than the usual AGM. So, I think the question may be less relevant at this stage.
Rashad Kawan: Yeah. Next one here, what is the reason for the decline? I think we spoke about the Emaar Dev margins, but maybe the other question is around the Emaar Malls margin, and the reason for the increase in hotel margins.
Pawan Chindalia: Emaar Malls margin is not a decline, it is just a quarter-to-quarter comparison because typically what happens is a lot of leases and annuity comes in Q1. That recognition of turnover rent, which is loaded up in Q1. As a result of that, between quarters, it shows a decline. But if you look at the trend between the quarters, you will see the consistency of it. It is pretty much intact. The margins are pretty much strong on a nine-month basis, if you look at it. In terms of the hospitality, this is basically driven by Egypt.
Rashad Kawan: Okay. Staying on the hospitality theme, any impact on hotels because of the loss of Saudi tourists post the closure of Riyadh Airport?
Pawan Chindalia: I think overall occupancy is still as strong as we speak. I mean, it is getting better compared to previous months. But yes, tourism from Saudi has been lower as a result of the geopolitical situation. But again, the overall percentages, if you see, even for recent months, is about 7% to 8% lower than the same period last year. So, impact is there, but not as significant as far as the occupancy is concerned. The ADRs have been a little bit under pressure even in the previous months, and marginal impact is because of Saudi, but then there is an overall impact because of lower tourism anyways.
Rashad Kawan: Yeah, makes sense. A bit of a broad question here. Does the current geopolitical backdrop change your strategy in any way in the longer term? I know you kind of started to address it a little bit in your opening remarks, but if you can elaborate there, that would be great.
Pawan Chindalia: No, I think we have spoken time and again that the overall strategy remains the same. I think, on the development side, we have spoken about, I think, important for us will be to make sure the existing customers and the backlog is delivered, focus on execution, make sure the revenue gets recognized, the collection is there, the quality of projects is maintained, the value of the property is maintained. We will take measured approach in terms of launches. We will remain opportunist when the market recovers, but at the same time, we will try to make sure that the customer is taken care of. On our recurring business, I think the expansion plan continues to remain intact. Dubai Mall expansion is already progressing. The Square Mall is also in progress in terms of design. In terms of work as well, I think we have progressed on the package one is awarded.
Pawan Chindalia: The works below the ground is already in progress, and the new expansion of other malls, Oasis Mall, and we just spoke about it. All those continue to be in progress. Expo Mall is scheduled for 2028 delivery completion. Residential portfolio as well, we are currently in advanced stage in some of the projects. We have gone ahead and awarded the enabling works. I think overall strategy remains the same. It does not change as far as the business plan is concerned.
Rashad Kawan: Okay, understood. The next question here, how is the Indian, or I guess, how is the business in India and Egypt doing, and what is the profit contribution of those entities?
Pawan Chindalia: Egypt has been doing very, very well. The overall sales have been extremely strong, and that reflects in our international sales number as well. India has been, on the sales side, has been a bit slow this year compared to last year. But overall, between the businesses, our international contribution to profit is actually low single digit. 93%, 94%, 93% of our overall business is still dependent on UAE. The overall international is about 5% to 6%. That includes not just India and Egypt, including other locations as well. But yeah, among them, significant is India and Egypt.
Rashad Kawan: Okay. If I can come back to the launches that you guys have done over the quarter. You have had a handful of launches through this quarter. Can you talk through how those launches went in terms of absorption, relative to maybe your expectations at the start of the quarter?
Pawan Chindalia: Absorption was fine. Between the developments, we had the launch in Creek, and the absorption was very, very good. The project was very close to where the mall is coming, and we pretty much have sold out over 80%, more than 80% of that. We had launch in Emaar South that is close to about AED 2,000 a square foot, sweet spot between about AED 2 to 3 million apartments. We had very strong sales there. Valley, we had a launch that was a little bit slower, but other than that, we had pretty good sales, reasonably good sales, I would say.
Rashad Kawan: Okay, great. Another question that we have here is, and I am sure it is quite tricky to answer this, but is the company planning to increase its stake in Amlak Finance from the current 45% that you own?
Pawan Chindalia: No.
Rashad Kawan: Okay, that is very clear. I think with that, we do not have any more questions on the line. Should I pass it back over to you for any kind of closing remarks here?
Pawan Chindalia: No, thank you so much. Really appreciate everyone showing up and for those questions. I think, overall, the company performance has been good. We will continue to watch out how the regional developments play, and we will keep you updated on the progress by the next call.
Rashad Kawan: Thank you very much.
Pawan Chindalia: Have a good day. Thank you.
Amit Jain: Thank you.
Operator: Thank you very much. This concludes today's call. You may now disconnect your lines.
