Even in a stressful scenario assuming no new sales, an increase in delinquencies, and rising construction costs, Moody's believes the company is capable of completing its projects and repaying its debts in full. In return, Damac's rating benefits from its position in the Dubai market as the largest private real estate developer in terms of units delivered, along with its track record of outperforming real estate market cycles since its establishment in 2002. The rating is also supported by strong off-plan sales, high profit margins of around 49% in 2025, and prudent financial policies. Moody's confirmed the credit rating of Damac Properties at Ba1, along with confirming the probability of default rating at “Ba1-PD”, while maintaining a stable outlook for all related entities. The agency also confirmed the ratings of unsecured, guaranteed sukuk issued by Alpha Star Holding at the same level, a step that reflects the agency's confidence in the company's ability to meet its financial obligations in the coming years. Moody's explained that the rating confirmation is based on its assessment of Damac's ability to service its debt over the next two to three years. This assessment is based on a number of supporting factors, most notably the company's large deferred revenue portfolio of about $23 billion by the end of 2025, in addition to customer prepayments of nearly $6 billion deposited in escrow accounts, which reduces buyer default risk and limits the impact of price fluctuations on sold units. The agency also noted that Damac enjoys strong financials, supported by high liquidity and moderate debt levels, in addition to the availability of funding to complete all sold projects.
