As far as real estate projects are concerned, the Emirates ' two additional companies with a similar strategic task are Emaar Properties PJSC and Nakheel (part of Dubai World). It is a diversified group, with five subsidiaries under DHCOG, which essentially incorporates real estate and hospitality businesses, and two under Dubai Holding Investments Group (DHIG), which holds its international investment and private equity business. Dubai Holding 's hospitality businesses operate primarily under the renowned Jumeirah brand, which owns and manages luxury properties in Dubai (including the Burj Al Arab) and manages a selection of international properties (London and New York).

Tecom Investments is the subsidiary whose primary objective is to develop and expand Dubai 's knowledge economy by owning and managing some of the Emirates' core free zone developments, including Dubai Internet City, Dubai Media City and Dubai Knowledge Village. Dubai Properties is the main real estate subsidiary, managing large-scale residential and commercial infrastructure developments in Dubai, including Jumeirah Beach Residence and the Business Bay downtown business district.

Tatweer is the group 's second domestic real estate subsidiary, focusing largely on life-improving industries such as Dubai Healthcare City and Dubailand, while Sama Dubai, which is the fifth subsidiary under DHCOG, is primarily involved with international expansion of the group 's development expertise, with construction projects currently envisaged in Qatar, Oman, Bahrain, Morocco and Turkey, as well as the ambitious 'The Lagoons ' complex in Dubai. Dubai Holding's primary aim is to develop existing and identify future projects to grow and diversify Dubai's economy, and subsequently apply its expertise internationally

Dubai Holding aims to create a strong foothold across a diverse range of industries to execute the vision to create a diversified, knowledge-based economy, and export this knowledge for the benefit of the region.

Accordingly, the group 's strategy focuses on three core objectives: (1) Value creation for its shareholder,(2) diversification of the group's portfolio, and (3) the creation of a solid foundation for the development of Dubai in terms of people and economic growth. While some of the group 's activities carry an element of social and infrastructural significance, all activities are expected to be economically viable and are carried out on the principle of commercial justification. Accordingly, rather than creating a government monopoly, the strategic task of developing Dubai 's large-scale real estate projects has been given to three companies, thus facilitating competition and adherence to best practices.

While today, Dubai Holding is primarily a real estate developer, the group plans to gradually diversify internationally and into other businesses.

In 2006,the group acquired a 35 per cent stake in Tunisie Telecom, the incumbent telecom provider in Tunisia, for $2.25 billion, and a 60 per cent stake in MaltaCom for $280 million, through Tecom and Dubai Investment Group,thus staking its claim to potential further telecom investments in the wider region.

The group was also instrumental is establishing Dubai 's newly established second mobile operator under the 'du ' brand,, in which it still holds a 20 per cent stake. Further investments in energy businesses through EMPOWER (also located under the Tecom subsidiary) are also likely.

While the potential for expansion — particularly if debt-financed — adds some uncertainty to the group 's credit profile, this risk is mitigated by Moody 's view of the close alignment between any such expansion and the policy vision for Dubai and the region of the government in general,and His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai,in particular.

Moody 's anticipates that Dubai Holding will first and foremost be focused on developing the large-scale projects for the development of Dubai and will hence remain dominated by real estate activities. This view is supported by the still substantial land that the group has available for development in Dubai,which includes an array of both commercial and residential developments. Moody 's also takes comfort from the group 's stated intention to further increase stable cash flows from rentals over time,which are prevalent in its free zone developments. Dubai Holding also intends to maintain a degree of ownership in most of its core developments in order to add a greater overall share of such rental income to its portfolio.  DHCOG 's A1 rating reflects the group 's intrinsic financial strength and the credit enhancement that can be derived from the financial strength of the Emirate and the group 's ultimate owner, His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President, Prime Minister and Ruler of Dubai.

Business risk: Despite an array of growing businesses, DHCOG's credit profile is essentially characterised by real estate activities and benefits from the unique provision of free land by the government. The group 's credit drivers are essentially real estate, with some additional contribution from hospitality, which until recently was the main contributor to the group 's bottomline. The real estate activities are mainly carried out in Dubai Properties,Tatweer and Sama Dubai, while Jumeirah 's and Tecom 's earnings profiles are more dominated by lodging and recurring rental income, respectively.

This unique characteristic of the Dubai property market provides substantial institutional support to DHCOG 's credit profile,and has historically enabled the group to undertake largescale property development programmes without the need for any external financing. The group 's property business is in a fairly early stage and ratings therefore benefit from the still substantial remaining acreage in Dubai that can be partially sold and developed. The expectation of ongoing land-sale earnings for the coming years provides support to the group 's fundamental credit profile, despite the overall proportion from this business expected to decline as developments complete. The group 's first major development,Jumeirah Beach Residence was completed on time at year-end 2006.

At the same time, however, Dubai Holding 's project portfolio includes some very ambitious and large-scale undertakings, including for instance Dubailand and Al Bawadi, a massive tourism complex which will contain the largest hotel in the world.

Such developments remain dependent on the sustained growth and stability of the region in general,and Dubai as a desirable tourist destination in particular,and therefore carry both execution and commercial risk. Ratings are constrained by the group 's high concentration on one economic region,thus showing high dependence on the sustained growth of Dubai 's property market,and — given its exposure to tourism projects — its tourist growth. As the group gradually adds international projects to its portfolio,diversification may reduce this risk over time.

Through its subsidiary Sama Dubai,the group has a moderate but growing international property business,through which it intends to export some of its acquired expertise into the wider region. Key projects include hotel developments in Oman,Bahrain and Morocco,as well as commercial developments in Qatar and Turkey.

Most of these developments are only expected to be launched in early 2007. Dubai Holding owns one of the region 's most valuable hospitality brands,Jumeirah,which is gradually diversifying internationally through managed properties. Jumeirah owns five prestige properties in Dubai,including the iconic Burj al Arab hotel,and manages an additional four,including new openings in London and New York. Going forward, Moody 's expects the group 's portfolio of managed properties to grow considerably, both in Dubai, which remains desperately short of five-star hotel room capacity,and abroad, including planned openings in London (Beetham Tower), Pukhet Private Island Resort (Thailand) and Shanghai, China. Moody 's,however,believes that the high-end Dubai hospitality market will become increasingly competitive as the market expands and more luxury properties establish presence there. In 2005/06 Dubai saw a string of new openings with around 1,000 additional rooms on offer,including the five-star Park Hyatt, Le Meridien Grosvenor House and Al Mourooj Rotana,and projected openings in 2007 of at least another 1,200 rooms,including the Amwaj Rotana Resort at the Jumeirah Beach Residence,the Movenpick Resort &Spa on Palm Jumeirah and the Four Seasons at Dubai Festival City. Increased competition is nonetheless mitigated by the expectation that demand is likely to continue to outstrip supply, particularly at the high-end of the market, if the government 's tourism projections can be believed. With 15-16,000 hotel rooms in Dubai today,the government expects these to rise to 100,000 by 2010 in order to cater for 15 million tourists annually from around 6 million today.

Risk profile: DHCOG's financial profile will change fundamentally from its present state. The companies within Dubai Holding are fairly young operations,which make existing historical financial information fairly meaningless as far as its profile going forward is concerned. While the group has IFRS-compliant numbers which are audited, these relate to DHCOG, while those of Dubai Holding are not public. The main sources of revenue as per year-end 2005 are essentially hospitality (Jumeirah)and rental revenues (primarily from the existing free zones),which are expected to grow going forward. DHCOG has relatively low incremental debt,though approximately $2.7 billion were raised in 2006 as a bridge

facility to fund its recent acquisitions of Tunisia Telecom and Maltacom which will require refinancing in 2007. Moody 's expects the group to be able to fund the large part of its domestics real estate properties from land sales and advance payments,although international developments at Sama Dubai may require some moderate debt financing over time. Debt is mainly raised centrally at DHCOG,and indeed this is also where any capital markets debt will be raised. Nonetheless,some debt is located at Tecom and Jumeirah,which is expected to remain there to maintain current pricing and tenor. Moody's ratings do not assume any exceptional support from DHCOG to the financial investment arm other than the group's stated dividend policy.

Dubai Holding Investments Group (DHIG)includes the group 's private equity arm (Dubai International Capital, DIC) and financial investment business (Dubai Investment Group,DIG),which is 51 per cent owned.

Both subsidiaries conduct global investments with no recourse to the parent or DHCOG. DIG currently holds short and long term investments of more than $4 billion, while DIG holds direct and strategic investments,funds and co-investments across various industries and regions,including ownership of leisure group Tussauds,UK engineering company Doncasters and budget hotel operator Travelodge.