Dubai developer Emaar has announced plans to list 30 per cent of its UAE real Estate Development business on the Dubai Financial Market (DFM).
The funds raised through the sale of equity will be primarily distributed as dividends to Emaar’s shareholders, a statement said.
The IPO will be the largest since the Emaar Malls IPO, which which raised Dhs5.8bn in 2014, it added.
Emaar’s real estate business recorded sales of Dhs14.4bn in 2016, up from Dhs4.2bn in 2012.
Until end of May 2017, the business recorded sales of Dhs9.7bn, up 24 per cent compared to the same period in 2016. Total backlog – representing the value of properties sold but where related revenues have not been recognised – stood at Dhs40bn at the end of May.
“The decision to list Emaar’s UAE Real Estate Development business was a result of an internal review of Emaar’s asset values,” the company said.
“This indicated the importance of highlighting the value of this business as a major contributor to the overall profitability of Emaar through an independent listing.”
Investors can invest directly in the business and the move is hoped to enhance Emaar’s overall valuation.
Mohamed Alabbar, chairman of Emaar Properties, said: “The proposed listing and the additional dividend to our shareholders including government of Dubai underlines our commitment to provide superior value to all our shareholders.
“Over the years, we have generated significant returns from our UAE real estate development business and it continues to be a strong driver of growth for the group.
“As Emaar’s other businesses have grown and expanded, we wanted to ensure that investors who value the UAE Real Estate Development business the most, the foundation of Emaar’s success, can do so directly. This will ensure that the value of this business is properly recognised, thereby enhancing value for all Emaar shareholders.”
Emaar has handed over around 34,000 units in Dubai since 2001 and currently has a land bank of 24 million sqm in the UAE. The total development area on these lands is approximately 30 million sqm.
The developer of the world’s tallest building – the Burj Khalifa, Emaar is now building The Tower in Dubai Creek Harbour – which is billed to be even taller than the Burj Khalifa. It is set in the 6 sqkm Dubai Creek Harbour mega-development, developed as a joint venture with Dubai Holding.
The company also has other mega-developments ongoing in Dubai including the 11 million sq m Dubai Hills Estate, developed as a joint venture with Meraas Holding, which will feature a retail hub and an 18-hole championship golf course, and Emaar South, a major project set near the venue of Expo 2020 Dubai.