Eshraq, an Abu Dhabi developer, may become the first UAE company in nearly two years to test the IPO market.
Eshraq is reportedly planning to offer as much as 55 per cent of the company in public shares as early as February, a source familiar with the deal confirmed.
Any IPO in the UAE is likely to face skeptical investors, analysts say. Telecom retailer Axiom cancelled an announced offering in December, citing "market conditions and liquidity" concerns.
"In this market for a UAE company without a strong prospectus and a growth story, it is going to be quite difficult," said Chet Riley, an analyst with Nomura Securities. "It will be pretty tough in this market to get away with a property IPO."
Eshraq lists three projects in early stages of development: Marina Rise, a cluster of residential and office towers on Reem Island, first announced in 2007; a mixed use project called "Gateway" between Al Maqta and Zayed bridges in Abu Dhabi; and Jumeirah Rise in Dubai.
Company executives didn't return calls seeking comment.
Investors will be wary of a property company without completed projects and established revenue, analysts say.
"Any IPO related to real estate would have to be offered at a significant discount" to the book value of the company, said Majed Azzam, analyst with Alembic HC Securities. "
