Emaar to float just 20 per cent of real estate development subsidiary

The share listing will take place in November on Dubai Financial Market

22/10/2017 13:52 AST

Emaar Properties, the UAE's largest listed real estate company, said on Sunday it plans to float 20 per cent of its real estate development subsidiary in November, lower than initial estimates of up to 30 per cent.

The listing will be only the second IPO on the Dubai bourse since 2015, and the third for Emaar.

"The IPO of our UAE development business will allow potential investors an opportunity to participate in a pure play UAE developer offering strong and stable cash flows and an attractive dividend yield," said Mohamed Alabbar, chairman of Emaar Properties. "Additionally, it offers the opportunity for Emaar Properties' shareholders - including the UAE Government - to unlock the true value of our UAE development business."

Emaar's board approved on Saturday the initial public offering of the unit on the Dubai Financial Market and the transfer of "certain assets of the real estate development business of the company in the UAE" leading to the "conversion of Emaar Development into a public joint stock company.".

Retail investors can subscribe to the IPO between November 2 - 13, while qualified investors can subscribe between November 2 - 15.

Dubai's biggest listed developer said this summer that the funds raised would be "primarily distributed as dividends to Emaar's shareholders".

Emaar Malls was added to the DFM in 2014, with its Egyptian unit hitting the Cairo stock market the following year.

Emaar Development represents 20 per cent of the parent group's assets. A public listing would clinch more funds for Emaar's overall investment strategy.

Emaar Developments last week said that comprehensive income rose 32 per cent year-on-year to Dh2.1 billion for the first nine months of this year.

Revenue for the period rose 27 per cent to Dh6.5bn, with income from apartment sales rising 82 per cent.

Emaar Development, which has built 34,500 residential units since 2002, has over 24,000 residential units under development as of end of September.

The subsidiary plans to launch around 50,400 units over the next 5 years with an average annual unit sales target of 10,000 units and a targeted overall gross profit margin of 40 per cent, in line with its track record, the company said.

As of the end of September, the company has also sold 80 per cent of its units under development, which have an average gross profit margin of 41 per cent for sold units and a sales backlog of Dh41 billion.

The National