...- We expect Damac Real Estate Development Ltd.'s operating performance will remain weak through 2022, with revenue declining by about 40%-45% in 2021, given its concentration in Dubai's high-end residential real estate market where prices remain under pressure and our expectation of limited new developments in the pipeline. - Nevertheless, we expect Damac will continue generating cash flows from property handovers and release escrow cash, which it will use to repay its sukuk maturing in April 2022, and reduce debt, such that debt to EBTIDA remains below 5.0x until 2022. - We are therefore affirming our 'B' rating on Damac. - The negative outlook indicates that any negative cash flows or further weakening in earnings would hamper Damac's ability to continue deleveraging. Furthermore, we see an increasing risk that Damac may be unable to sustain its current business position, given limited sources of revenue growth....
