Dubai Business Parks Generate Record Cash, Boosting Shareholder Payouts

Tecom Group’s Dubai business parks and free zones generated enough cash in the first half of 2026 to push free cash flow past AED1 billion, a 12 percent year-on-year rise that has now translated into a $120 million interim dividend for shareholders.

The payout, set at AED440 million, will be distributed in August. It is the first of two planned distributions under an updated dividend policy shareholders approved in March, which fixed the total annual payout at AED880 million for 2026. By contrast, the company distributed AED840 million during 2025, making this year’s commitment a step up. The second distribution, expected later in the year, would complete that full AED880 million if operational performance holds.

Revenue expanded 11 percent year on year in the first half, driven by higher occupancy, rising rental rates, and a broader asset base. Net profit rose 9 percent over the same period. The second quarter tracked closely, with top-line growth of 11 percent and net earnings up 7 percent.

Demand for space across Tecom’s portfolio stayed strong. Grade-A offices recorded occupancy and retention rates of 96 percent and 94 percent respectively in the first half. Industrial assets outperformed even those figures, posting occupancy of 98 percent and a retention rate of 99 percent, reflecting sustained appetite from manufacturing and logistics operators. The company’s land lease portfolio revenue jumped 22 percent year on year, a signal of growing business interest in land-based development opportunities within Dubai’s free zones.

Tecom operates 10 business districts across Dubai, including flagship properties such as Dubai Media City and Dubai Internet City, which anchor much of the company’s revenue and occupancy performance.

Market reaction was subdued. Tecom shares closed 0.9 percent lower at AED3.34 on the day of the announcement, and the stock has declined 2 percent so far this year. Dubai Holding Asset Management holds a controlling stake of 86 percent in the company.

The interim payment reflects management’s confidence that current cash generation levels are sustainable enough to balance shareholder returns with ongoing capital requirements. Whether the second distribution arrives on schedule will depend on whether the occupancy and revenue trends of the first half carry through to year-end.