Dubai’s Damac Picks Banks For London IPO – Sources

Damac Properties, a privately held Dubai property developer, has hired two international investment banks to help arrange an initial public offering of shares in London and join a growing list of Gulf companies seeking overseas listings.

Deutsche Bank and Citigroup Inc will advise on the planned flotation, two banking sources aware of the matter said, speaking on condition of anonymity as the matter is not public.

The company, which develops luxury villas and apartments, said in April an IPO was one way to raise funds to ride a recovery in the development market following a crash in 2009.

Led by Hussain Sajwani, Damac symbolised the flamboyance of Dubai’s property market during the boom years, handing out sports cars and yachts to customers of penthouses and duplex homes.

The developer, which was founded in 2002, scaled back on projects during the downturn but has now returned with new schemes.

It recently announced plans for a $1 billion Hollywood-themed development in Dubai with Viacom Inc’s Paramount Group and said in May it was working with American real estate mogul Donald trump to build a new golf course in Dubai.

A spokesman for Damac declined to comment but reiterated that the company was looking at all future growth possibilities. Deutsche Bank declined to comment, while a spokesman for Citigroup in Dubai was not immediately available.

A London listing would make Damac the first major property firm in Dubai to conduct an IPO since the emirate’s property market imploded. IPO plans by family-owned Al Habtoor Group were shelved last year.

Dubai’s property market is recovering after a 60 per cent plunge in prices.

But one of the banking source said it would be a challenge to attract overseas investors chastened by losing billions of dollars when the property crisis erupted and still wary of corporate governance issues and speculative activity.

“It will be a big achievement if they are able to pull off an overseas listing. Dubai’s real estate market is recovering but there is still a lot to be done in the sector before they can venture into an overseas market,” the source said.

Damac joins a growing list of Gulf companies seeking international investors amid a lack of liquidity and institutional interest in regional markets.

Abu Dhabi private equity firm Gulf Capital appointed Rothschild as a financial advisor for a potential IPO of its majority-owned unit, Gulf Marine Services.

Other Abu Dhabi-based firms have floated in London recently. Al Noor Hospitals listed in London in June with a valuation of $1 billion. Its rival, NMC Healthcare listed in London last year.

The source said the fact that the company had resolved its pending issues with the Egyptian government would help it focus more on the IPO. Egypt said in May that it had settled disputes with Damac involving projects dating back to before Hosni Mubarak was deposed as Egyptian president in 2011.