Emaar Properties, owner of one of the world’s biggest shopping centres, has set the initial public offering of its malls business in Dubai for October, in what could be the largest share sale in the United Arab Emirates since the financial crisis, underscoring the region’s revival.
The sale reflects a resurgence of investor interest in Dubai on the back of a revival of its property and tourism sectors. Amid political uncertainty in the Middle East, the UAE has emerged as the safest location in the region and has attracted substantial investment.
A successful IPO on the Dubai Financial Market could encourage others to follow and would be a further boon for the UAE, which in June was upgraded by the MSCI index from the investor category of frontier market to emerging market.
Emaar Properties, whose developments include The Dubai Mall and Burj Khalifa, the world’s tallest building, said on Sunday that it expected to list at least 15 per cent of its malls business in the offering, which was first announced in May.
The bookbuilding will begin later this month.
The malls business is one of Emaar’s high-performing subsidiaries and recorded revenues of $340m during the first six months of this year, an increase of 13 per cent from the previous year.
Mohamed Alabbar, chairman of Emaar Properties, which is about a third owned by Dubai’s government, said: “The IPO of EMG is a milestone for the development of the UAE capital markets as, for the first time, it combines institutional and retail shareholders in the same offering.”
Seventy per cent of the offering will be made available to institutional investors, with the remaining 30 per cent targeting individual investors. Emaar did not state a valuation for the IPO but said it had earmarked about $1.44bn from the IPO proceeds to be paid as a dividend.
The emirate has been investing heavily into its airports and aircraft, public transport and hotels to attract tourists to the region. Dubai’s tourist numbers rose 10 per cent to 11m in 2013, and this year its economy is expected to grow about 5 per cent, according to the Dubai Statistics Centre.
The listing is a boost to the Dubai Financial Market, which lost out to London for the listings of other regional companies including Dubai developer Damac and Abu Dhabi-based oil services provider Gulf Marine Services.
Emaar Properties had initially suggested that it might choose London for the listing, but it received a regulatory waiver allowing it to list a minority stake in Dubai.