Dubai’s Emaar Properties to launch IPO

Emaar Properties has hired Goldman Sachs Group Inc. to manage the sale of shares in its United Arab Emirates real estate development business in Dubai, chairman Mohamed Alabbar said.

The developer of the world’s tallest tower expects to complete the initial public offering by November 2017 with a size similar to its Emaar Malls PJSC offering, Alabbar said in an interview with Bloomberg Television. The malls unit IPO raised about $1.58 billion in 2014 and is the largest share sale in the UAE in the past nine years, according to data compiled by Bloomberg.

Emaar, listed on the Dubai Financial Market, announced plans to spin-off its real estate unit and use the proceeds to pay a special dividend. The move sent shares in the company up 8.6% recently. Revenue from the company’s property development business in the UAE more than tripled to 14.4 billion dirhams ($3.9 billion) in 2016 from 4.2 billion dirhams in 2012, according to Wednesday’s announcement.

Dubai’s biggest publicly-traded company is listing its UAE real estate arm to help achieve a better valuation from investors. The shares have rebounded 9% since dropping to a six month low on 6 June, 2017.

More spin-offs

Emaar has transformed itself into a conglomerate with mall, hospitality and entertainment divisions after starting as a property developer in 1997. After developing the Burj Khalifa, the world’s tallest skyscraper, the company is now working on The Tower in Dubai Creek Harbour with Dubai Holding LLC. It is also developing the 11 million square-metre Dubai Hills Estate with Meraas Holding LLC, which will feature an 18-hole golf course.

Emaar may consider spinning off its entertainment and hospitality units as it seeks to maximize its equity valuation, Alabbar said.

Blackstone Group LP and CVC Capital Partners are among buyout firms weighing a bid for as much as a 40% stake in some of the assets in Emaar’s entertainment division, people familiar with the matter told Bloomberg in May. The entertainment unit includes Dubai Aquarium & Underwater Zoo, Dubai Ice Rink and movie-theatre chain Reel Cinemas.

SOURCE – REUTERS, BLOOMBERG, EMIRATES 24 X 7 NEWS WEBSITE