Emaar Properties, the biggest publicly traded real estate developer in the UAE, said it would start the sale of a 15 per cent stake of its malls unit in an initial public offering next week, in another sign that Dubai has recovered from the debt crisis of 2009.
Shares of Emaar Malls Group (EMG) will go on sale on Sunday, September 14, when the share price range will be revealed, the state-controlled company said.
The offering to retail investors closes on September 24 and the one to institutional investors on September 26, with the final price to be determined by a book building process in which the price is reached by gauging demand. The company's shares will be listed on the Dubai Financial Market on October 2, Emaar said.
“This move is positive for existing Emaar investors as a spinning off, and separate listing will most likely raise the value of the Emaar Malls Group. If it is a success it could be the start of other Emaar operations also listing separately to maximise their valuations,” said Sachin Mohindra, a portfolio manager at Invest AD, an Abu Dhabi-based investment manager.
“We like the business of the company and are evaluating the IPO from a valuation angle very closely. Our feedback from international investors is that they are excited about this IPO as well. Investors are excited about getting exposure to a very important and profitable player in Dubai’s retail sector.”
Shares of Emaar have jumped more than five times to Dh11.25 after reaching a low of Dh2.19 in March 2011 in the aftermath of the emirate’s debt crisis, which caused real estate prices to collapse.
In the past two years, however, Dubai has made a comeback amid debt restructuring, government spending on infrastructure and a rebound in tourism and trade.
The country’s economy grew more than 4 per cent last year, with property values and stock prices back near to pre-crisis levels.
EMG has a net asset value of Dh33.2 billion and its biggest asset is The Dubai Mall, the most visited mall in the world with an estimated 75 million shoppers last year. Assets included in the IPO are Dubai Marina Mall, about 30 smaller retail centres, the Souk Al Bahar entertainment complex in Downtown Dubai and the Gold & Diamond Park for precious metals and jewellery.
Emaar has hired a large group of advisers for the IPO. Three American banks – Merrill Lynch, JP Morgan and Morgan Stanley – are joint global coordinators, and they are joined by EFG Hermes, Emirates Financial Services, HSBC Middle East and National Bank of Abu Dhabi as book runners. Rothschild is the investment bank adviser for the offering. Emirates NBD and NBAD are the lead receiving banks.
Emaar said it wanted retail investors to take no more than a total of 40 per cent of the offering, with the remainder earmarked for institutional investors.
mkassem@thenational.ae
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