Dubai skyline, including the Emaar-devleoped Burj Khalifa, left background © Bloomberg
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Emaar is selling hotels, clinics and schools as Dubai’s leading developer seeks to raise funds by disposing of non-core assets in the midst of a property slump in the Gulf’s business hub.

Dubai-based Emaar, chaired by influential businessman Mohamed Alabbar, was closing in on a deal with several interested parties, people briefed on the process said.

Emaar, in which the government holds about a 30 per cent stake, was seeking up to $1.4bn for the assets, the people said.

The real estate market, one of the city’s main economic drivers, has been hit hard by a slump in regional demand since the oil price collapsed in 2014.

“This has to be about raising capital to strengthen the balance sheet,” said one banker. “This is not the market environment you would want to sell assets in if you were being opportunistic.”

In a statement, the developer of Burj Khalifa, the world’s tallest tower, said it regularly considered various financing options to streamline its business.

The company is looking to raise about $700m by selling its hotel portfolio, except for two prime properties. Emaar is also selling the clinics and schools across its communities at a prospective value of $700m.

Standard Chartered Bank had been hired to carry out the sale process, the people said. The lender declined to comment.

Emaar’s share price, which has halved since its September 2014 peak, is down about 20 per cent this year.

The company has managed to navigate the economic downturn better than some of its rivals, seeing healthy profits last year and the first quarter of this year. However, it has expressed concerns about market conditions in the near term.

Strong new project activity in 2016 and 2017 has weakened dramatically, according to statistics released by Meed Projects, an information provider. They show $1.4bn of new construction project awards in the second quarter of 2018, a fraction of the $5.2bn recorded in the first quarter of 2018 and $5.6bn during the second quarter of a year ago.

About 90,000 new units are forecast to enter the market through 2020, according to consultancy CBRE, just as demand starts to wane.

Dubai’s economy has been hit hard since the oil price slump of 2014, which prompted a three-year downturn across retail and hospitality. The UAE’s introduction of a sales tax this year has exacerbated tough trading conditions.

Many expatriate jobs have been cut as companies slash costs, damping consumer sentiment.

Responding to the slump, Dubai has boosted infrastructure spending and capped fees; oil-rich Abu Dhabi, also hit by the downturn, has announced plans for a Dh50bn ($13.6bn) stimulus to foster growth.

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