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Dubai’s Emaar Properties is merging with its Emaar Malls business as operators of retail malls in the Gulf region delay new mega-projects as a result of the COVID-19 pandemic.

The all-share deal between Emaar Properties and Emaar Malls, which was announced on Tuesday by the two companies, was approved unanimously by the boards of both companies.

It is expected to boost the combined group’s position as a national real estate champion, contributing to the ongoing development of Dubai, whose tourism and retail heavy economy has been hard hit by the coronavirus crisis and low oil prices.

Under the deal, Emaar Malls will reconstitute its existing business into a wholly owned subsidiary of Emaar Properties and will continue to develop and hold a portfolio of premium shopping malls and retail assets.

Emaar Properties will be listed on the Dubai stock market.

Subject to regulatory approvals, Emaar Malls shareholders, excluding Emaar Properties will receive 0.51 Emaar Properties shares for each share they own at Emaar Malls, representing a premium of 7.1 percent to the closing price of Emaar Malls on Monday.

Emaar posted a net profit of 2.62 billion dirhams in 2020, down from 6.2 billion a year earlier, while revenues slid to 19.71 billion dirhams in 2020 from 24.59 billion a year earlier.

Emaar’s founder Mohamed Alabbar was more optimistic about 2021, saying there were opportunities both traditional and technological that didn’t exist five or 10 years ago.

Dubai’s house prices are expected to fall at a slower pace this year and next than previously thought as hopes for a successful vaccine rollout and an economic recovery boost confidence in the sector, a Reuters poll showed.

*Reuters