Emaar Properties says 'hotel fire' will not affect revenues
A fire engulfs The Address Hotel in downtown Dubai.
Dubai - Emaar's shares, down 1.6 per cent at Dh5.6, having fallen as much as 4.4 per cent in early trade, led the decline in Dubai stocks three days after a fire ripped through one of its hotels on New Year's Eve.
Emaar Properties on Sunday said a hotel fire should have 'no material impact on the company because the building and risk of fire are covered by its insurance.
Emaar's shares, down 1.6 per cent at Dh5.6, having fallen as much as 4.4 per cent in early trade, led the decline in Dubai stocks three days after a fire ripped through one of its hotels on New Year's Eve.
"The fire has been contained and the company and authorities are investigating its cause," Emaar said in the statement to Dubai's bourse on Sunday.
In a brief statement, Emaar said the building and risk of fire are covered by insurance so there should be no material impact on the company as a result of this incident.
Analysts tended to agree: "The operational impact of the fire incident on Emaar's expected 2016 revenue and earnings per share estimates is not significant in our view," said a note by Arqaam Capital.
Emaar is the biggest contributor to the Dubai Financial Market's General Index, which closed 0.5 per cent down at 3,134.98 points. Abu Dhabi market also retreated 0.83 per cent at 4,271.57 points.
A blaze engulfed Emaar's 63-storey Address Downtown luxury hotel and residential tower on New Year's Eve. The blaze capped a challenging year for the emirate's real estate industry, which is struggling with falling property prices amid a slump in oil, just as the dirham's peg to the dollar makes purchases more expensive for overseas buyers.
"Emaar's statement helped halt some of the panic selling we saw at the beginning of the session, but investors still have questions," said Samer Al Jaouni, the head of institutional business at Menacorp, one of the biggest brokerages in Dubai.
"The company needs to clarify the amount and percentage of cash flow that this hotel was contributing to Emaar's hotel portfolio," he said.
The latest available government data shows that real estate and business services accounted for 14 per cent of the Dubai's gross domestic product in the first quarter of 2015. The DFM Real Estate Index fell as much as 2.8 per cent, the most in two weeks, before trading 0.6 per cent lower.
With inputs from agencies