- Emirates Reit manager sees opportunity
- Weaker income snares indebted owners
- Sellers may include private investors
Dubai’s war-driven tourism slowdown could create hotel-buying opportunities by the end of the year as weaker income puts pressure on indebted owners, according to an executive whose group is considering investments in the sector.
Sylvain Vieujot is co-founder and chairman of privately held Equitativa Group, which manages sharia-compliant real estate investment trust Emirates Reit. He told AGBI potential sellers could include private investors who bought hotels during years of consistently high occupancy, when strong demand made the assets relatively easy to run.
“Hospitality is very much under pressure,” Vieujot said. “If you have no income for a year, probably, and you have a big loan, you’re probably going to end up in some kind of trouble. So I expect to have huge opportunities by the end of the year.”
US and Israeli strikes on Iran in February abruptly derailed the momentum from a record year for Dubai tourism, as Iranian retaliation triggered repeated safety alerts across the UAE.
Occupancy at some hotels fell into the single digits and low teens, intensifying pressure on owners reliant on room income to service debt.
The shock hit a sector that contributed about $72 billion, or nearly 13 percent of UAE gross domestic product, and supported roughly 925,000 jobs in 2025. Dubai welcomed more than 19 million international visitors last year.
The UAE has reported no fresh attacks since April 8, but uncertainty remains over whether tourists will feel secure enough to return as the conflict continues, particularly if hostilities flare again.
“I definitely expect Dubai to bounce back in terms of attractiveness for tourism,” Vieujot said, but he added that prolonged financial pressure could bring attractive assets to market over the next several months to two years.
The industry’s largest hotel operators have all said their Middle East business declined in the first half of the year. Accor said the damage was concentrated almost entirely in the UAE.
Any investment would likely be made through a separate vehicle rather than Emirates Reit, whose portfolio is focused on office and education properties, he said.
DIFC resilient
Emirates Reit is listed on Nasdaq Dubai. Vieujot was speaking after the investment trust reported first-quarter total property income of $21.2 million, up 10 percent from a year earlier, while net property income rose 16 percent to $19 million.
Profit fell 77 percent to $35.2 million, largely because unrealised property revaluation gains dropped to $27.9 million from the year-earlier $148.6 million.
The portfolio was 96 percent occupied at the end of March.
That performance follows a balance-sheet overhaul after Emirates Reit withdrew a proposed exchange of its $400 million sukuk in 2021. It refinanced the debt with a $380 million secured issue in 2022 and, after partial redemptions, replaced the remaining balance with a $205 million sukuk in December 2024.
Vieujot said the investment trust’s office properties had so far shown little impact from the conflict. It continued to sign leases at its Dubai International Financial Centre properties during the height of the disruption.
Several renewals were delayed during the peak of the war but subsequently completed without significant change in rents or demand, he said.
“We didn’t lose any tenants,” Vieujot said.
Any deterioration in commercial property would take longer to emerge because office leases typically run for several years, compared with the short booking cycle in hospitality, he said: “I don’t expect a lot of distress coming right away.”
Equitativa tracks about 2,300 UAE properties through a database it has built over more than a decade, allowing it to revisit assets when they come to market.
Non-core and underperforming assets
Equitativa targets “properties that have problems” it can address, including low occupancy, poor access or weak management.
“If you want to buy fully leased long-term assets and assets that have no problem, you will not see a huge discount,” Vieujot said.
Opportunities are more likely to emerge as companies sell properties outside their core businesses to raise cash, he said.
Residential developers, for example, may dispose of non-core assets to focus on their main projects.
He also identified schools, logistics assets and properties in the northern emirate of Fujairah as potential opportunities.
Some school operators own their campuses but need capital to expand their education businesses. Selling the property and leasing it back could release cash for growth while providing a buyer with a long-term tenant and predictable rental income, Vieujot said.
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In Fujairah, tighter access to financing could create opportunities to back viable developments whose owners have land or projects but lack the capital to proceed, Vieujot said.
Fujairah is gaining strategic importance after ports operator DP World agreed in principle to develop two east-coast terminals, expanding the UAE’s trade capacity outside the Strait of Hormuz.
Vieujot said the conflict had not altered Equitativa’s long-term view of the UAE market.
“If you look 10 years down the line, I think we want to take the most advantage of this market now,” he said.
Emirates Reit shares were trading 10.4 percent lower in the year to date at $0.619 on Wednesday, while remaining about 20 percent higher than a year earlier.