Cash Cow - Emaar

Cash Cow

Emaar started its domestic activities right at the start of the construction boom in the U.A.E. Emaar should be aware that Dubai and Abu Dhabi soon will step in the mature stage of the market. Of course it is not a big deal for Emaar group as they have started to diversify their activities in the international market since 2004 but they should also start looking in to other subsidiaries and diversify investing in other parts of the country rather than mostly in Dubai or Abu Dhabi. Fortunately Emaar with making Emaar Malls and Emaar retails in this market can benefit long term from the market and invest money in different areas and different subsidiaries. Emaar also can milk the market with its financial services that has been provided to its clients. As they finance their own projects for buyers/investors, Emaar secures its cash cow flow of revenue by its financing fees which it collects over the next 15-30 years. For example, Emaar makes a profit on every home that resells. Also Amlak financial service which is owned mostly by Emaar will make a profit on financing the same home to the customer/ investor.

Property management service is the other way for Emaar to benefit long term in this market. Emaar charges every tenant yearly for the maintenance and giving services to their clients. Additionally, Emaar hospitality group is the other way for Emaar to stay long term in the market and benefits from the mature market and invest the money in the other parts of the world. For example, Emaar gulf clubs are in one of these places.