Dubai – Mubasher: Emaar Properties plans to offer up to 30% of its UAE property development business through an initial public offering (IPO) on the Dubai Financial Market (DFM).
The funds raised through the equity sale will be distributed as dividends to Emaar’s shareholders, according to a bourse statement.
The offering will be the “largest” since the Emaar Malls IPO in 2014, the company said.
The decision came after an internal review of Emaar’s asset values, highlighting the value of this business as a major contributor to the overall profitability of the developer through an independent listing.
Emaar’s real estate development saw a significant growth over the last five years in the UAE, with property sales increasing to AED 14.4 billion ($3.92 billion) in 2016 from AED 4.2 billion ($1.14 billion) in 2012.
The business recorded sales of AED 9.7 billion ($2.64 billion) until the end of May 2017, 24% higher than sales in the same period in 2016. Total backlog also reached AED 40 billion ($10.9 billion).
"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," said chairman Mohamed Alabbar.
