Damac Real Estate Development's financial performance weakened in 2017, owing to higher marketing costs and lower margins in international operations. We expect further weakening in 2018 and 2019 due to softening of the Dubai real estate market. We are, however, affirming our 'BB' ratings on Damac, as they incorporate headroom for weakening of financial performance driven by the real estate downcycle. The stable outlook reflects our opinion that the company will withstand the current softening of Dubai's residential real estate prices over the next 12-24 months. On March 23, 2018, S&P Global Ratings affirmed its 'BB' long-term issuer credit rating on Dubai-based Damac Real Estate Development Ltd. The outlook is stable. We also affirmed our 'BB' issue rating on the
