DUBAI - Emaar Properties said on Thursday it was buying out its joint venture partner in a Dubai real estate development, in a 7.5 billion dirham ($2 billion) deal that will see Dubai's ruler become the developer's second-largest shareholder.

Dubai's Emaar, the emirate's top developer, said in a statement it had reached a deal with Dubai Holding, Sheikh Mohammed bin Rashid Al Maktoum's investment vehicle, to buy its stake in their Dubai Creek Harbour joint venture.

The deal would be equally financed in cash and Emaar shares, making Dubai Holding its second-biggest shareholder, Emaar said.

The announcement was made after the stock market had closed. Emaar shares are up 16.5% so far this year to 5.7 dirhams, according to data provider Refinitiv.

It was not immediately clear how many shares Dubai Holding would own. Emaar's current biggest shareholder is the Investment Corporation of Dubai, the emirate's sovereign wealth fund, which owns 24.07% or about 1.97 million shares, according to Refinitiv.

Rothschild & Co said it was the sole financial advisor to Dubai Holding on the deal.

Dubai Creek Harbour, a residential, retail and commercial real estate development, is expected to cover 6 square kilometres once completed, according to its website. Development of the project stalled in 2020 due to the pandemic, though the emirate's real estate market has since rebounded strongly.

Emaar, which built the world's tallest tower, the Burj Khalifa in Dubai, said it recorded 3.6 billion dirhams in sales in Dubai Creek Harbor in the first half of the year, and 4.2 billion dirhams in all of 2021.

Sheikh Mohammed bin Rashid is also the vice president and prime minister of the United Arab Emirates. Dubai has recently listed shares in state firms with further listings planned as part of an effort to boost activity on its stock market.

($1 = 3.6727 UAE dirham)

(Writing by Alexander Cornwell; Additional reporting by Hadeel Al Sayegh; Editing by Alistair Bell and David Holmes)