EMAAR Properties: Analysis of Real Estate Company

Table of Contents
Executive Summary.....................................................................................................................................2
Introduction.................................................................................................................................................2
Competition.................................................................................................................................................3
Types of costs in EMAAR...........................................................................................................................3
Fixed Cost...............................................................................................................................................3
Variable Cost...........................................................................................................................................4
Competitors of EMAAR..............................................................................................................................4
Nakheel...................................................................................................................................................4
DAMAC..................................................................................................................................................4
SWOT Analysis.............................................................................................................................................5
PESTEL Analysis........................................................................................................................................6
Political factors........................................................................................................................................6
Economic factors.....................................................................................................................................6
Social factors...........................................................................................................................................7
Technological factors..............................................................................................................................7
Environmental factors..............................................................................................................................7
Legal factors............................................................................................................................................7
Demand curve.............................................................................................................................................8
Promotion/Marketing Affecting the Demand Curve................................................................................8
Supply Curve...............................................................................................................................................9
Promotion/Marketing Affecting the Supply curve...................................................................................9
...............................................................................................................................................................10
Price elasticity of EMAAR........................................................................................................................10
Luxury or Need.....................................................................................................................................11
Number of substitutes available.............................................................................................................11
Game theory..............................................................................................................................................11
Conclusion.................................................................................................................................................12
Proposed Strategy..................................................................................................................................12
References.................................................................................................................................................13

Executive Summary
EMAAR Properties (“EMAAR”) is a pioneer in the field of real estate in the Middle East. This
market research study aims at presenting an overarching, yet in-depth, analysis of the real estate
company.
Since its inception, EMAAR has proven itself capable of redefining the real estate sector in the
Middle East. The company has taken great strides over the past decade towards establishing
itself as a leader in the market via innovative strategies and business models, despite the
emergence of competition in recent years. As EMAAR looks to further strengthen its stronghold
in the real estate sector, it continues to face constant obstacles – especially in Egypt. The
dynamic, but volatile, political environment pervasive across the country has proven to be a
constant source of nuisance for EMAAR’s operations in Egypt, often disrupting the demand and
supply for the company’s products. To combat these issues, it would be in EMAAR’s best
interests to, for the short term, invest in promotions and advertisements, and for the long term,
seek to diversify its business.
The report is divided into nine sections. Sections 1-3 introduce EMAAR by providing a detailed
overview of the company’s operations, business model, and expenses. Section 4 lists and briefly
summarizes the existing competitors competing in the Egyptian real estate sector. This is
followed by sections 5-7, which present a thorough analysis of the various influential factors on
EMAAR’s operations in Egypt. Section 8 utilizes Game Theory to discuss the company’s
potential next steps. The report concludes by proposing certain strategies towards solidifying
EMAAR’s position as one of the leaders in real estate in the Middle East.
Introduction
EMAAR Properties (“EMAAR”) is a joint stock company headquartered in
the United Arab Emirates (UAE). It is primarily engaged in the real estate
market and provides management and property development services. A
leader in the UAE market, EMAAR is most famous for its involvement in
the construction of the Burj Khalifa – the tallest building in the world.
The firm is listed on the financial stock market of Dubai, with a valuation of approximately US$
9.7 billion. The company has sixty active companies across six diversified business segments
throughout North Africa, Middle East, North America, and Europe. These include subsidiaries in
countries such as Egypt, Jordan, Lebanon, Pakistan, India, Morocco, The United States, Saudi
Arabia, Syria, and Turkey.
The Unique Selling Proposition (USP) of EMAAR is innovation and ensuring that the highest
quality of product is used. This enables the company to create and generate efficient sales and
2

marketing strategies as well as target its market segment. EMAAR has received a plethora of
awards owing to its accomplishments in successfully implementing unique projects.
Competition
Over the past few years, EMAAR has been redefining the mechanism of property development
that has allowed it to serve as a national champion company throughout UAE and Egypt. The
company has always relied on the vision of discovering new ideas and methods so that it can
outperform others, thereby set an example for others across the world. Furthermore, EMAAR
believes that their shareholders have stood by them when they were providing development and
property management services throughout international markets. In addition, the company’s
shareholders have offered it various opportunities towards an incredible transformation
(EMAAR, 2019). Nevertheless, this has fetched Emaar an opportunity to build Dubai as an
extraordinary place throughout UAE and Egypt, thereby attaining the title of one of the most
admired and valuable companies.
Currently, models of business development are being modified and cycles of innovation have
been diminishing. As a result, companies that fail to react to such alternations encounter
immense risks that can affect their overall long-term growth prospects. However, EMAAR views
such changes as a valuable opportunity to establish a new trend in the international market.
Therefore, it endeavors in establishing innovative strategies and models that can allow it to
diversify its business and grant it the position of one of the leading businesses in the entire world
(Cohen, 2016). Overall, the company has been taking advantage of every possible opportunity
that can grant it the benefit of attaining enormous amount of profits that can further be utilized in
the establishment of smart cities.
Types of costs in EMAAR
The fixed cost that has been used in EMAAR is as follows:
Fixed Cost
A fixed cost is an expense usually borne by businesses and corporations. Such an expense does
not depend on the volume of production. The higher the fixed cost, the more likely a firm is to
sell of its products – in this case, properties. The following are some of the fixed costs borne by
EMAAR –
 Interest on Loan: This defines as any amount being borrowed by bank for acquiring
materials, construction and repairing the property.
 Municipal taxes: This would likely occur where EMAAR constructs is properties in the
South-Asian, European or North American countries.
3

 Repairs: Any subjective amount required repairing or renovating the property.
 Machinery: The equipment’s required to construct the buildings, shopping malls, and
much more.
Variable Cost
Variable cost is defined as the changes in the production output with respect to its volume. The
variable cost would increase as the production rises, and further decrease if the production is
down. In EMAAR, the variable costs incurred include Wages & Salaries; Utilities; and Materials
used in production.
Competitors of EMAAR
Nakheel
Nakheel is one of the leading contributors towards the realization of
Dubai’s vision. Aimed at establishing an effective class destination, the
company focuses on offering and enhancing a significant portfolio of
innovative projects throughout Dubai across segments like hospitality,
retail, residential, and leisure. Its developments collectively accumulate
more than 15,000 hectares of land and presently offer accommodation to
more than 270,000 people. These include The World, Palm Jumeirah, Jumeirah Heights,
Discovery Gardens, Dragon City, Nad Al Sheba, International City, etc.
Nakheel’s future and present portfolio of projects covers more than 17 million square feet of land
that can be offered for lease. Moreover, the company’s retail profile also comprises of various
centers of neighborhood communities (EMAAR, 2019). The company’s increasing hospitality
projects also cover fourteen serviced apartments or hotels that accommodates more than 5,200
rooms situated at distinct locations throughout Dubai.
DAMAC
DAMAC Properties has also made its mark in the field
of stylish living. It has affixed its place in the segment of
luxury development throughout the region. This can be
observed by the fact that it has offered 24,000 houses
with a portfolio of more than 40,000 residential units. Besides, this also comprises of 10,000
hotel rooms, hotel villas, and well serviced hotel apartments that are properly catered to by the
company’s wholly owned DAMAC Hotels and Resorts. The company has been focusing on its
never-ending commitments towards the provision of excellent services whether it is providing
assistance to a young couple to choose their perfect house or advising other investors in relation
4