Dubai developer plans to float 25% of shares and raise up to Dh9 billion in IPO
Emaar Properties, the operator of the world's largest mall, has announced a plan to float 25 per cent shares of its Emaar Malls Group on the Dubai Financial Market, or DFM, as a primary listing.
Last February, the Dubai-based developer announced its plan to raise up to Dh9 billion through initial public offering, using the generated funds primarily to distribute as a dividend to Emaar Properties shareholders.
Companies listing on Dubai's main bourse are normally required to float at least 55 per cent of stakes.
Emaar has received the required approval from the UAE's Securities and Commodities Authority, or SCA, to sell up to 25 per cent of its equity in Emaar Malls Group, the company announced on Monday.
The timing of the public offering and listing will be announced at a later date, said Emaar, which scrapped its earlier plans to sell shares in London and Nasdaq Dubai as a dual listing.
Since the announcement was made in the morning, there has been a quick reaction in the market. Emaar stocks rose 3.7 per cent to Dh10, helping the Dubai bourse benchmark index climb 1.9 per cent. Emaar is the biggest company on the bourse and its share price has jumped by more than 43 per cent this year. Following the listing, Emaar Malls Group will add significant value to the bourse, and is expected to drive more foreign direct investment to the country to boost the economy's overall competitiveness, according to the company.
Emaar Properties chairman Mohamed Alabbar said: "The malls business is one of our high-performing subsidiaries, and the proposed listing on DFM will enable the business to achieve its true potential."
"The positive economic indicators of Dubai, led by its status as a global hub for business and leisure and the massive infrastructure development in preparation for hosting World Expo 2020, are growth drivers for our malls and retail business," he added.
"The planned listing on the DFM will also benefit from the UAE entering the emerging market index of MSCI."
The Dubai Mall, Emaar's flagship mall asset, has continued to be a leading shopping and lifestyle destination in the region, with nearly 21 million visitors coming through its doors in the first three months of 2014. Last year, the mall saw over 75 million visitors from around the world.
Emaar is now further expanding its Fashion Avenue by one million sqft, adding more than 150 new shops to the mall.
Aside from The Dubai Mall, Emaar's malls assets include Dubai Marina Mall, Souk Al Bahar and Gold & Diamond Park, with a total leasable area of over 5.8 million sqft in Dubai.
Last month, Emaar Properties declared a 55 per cent increase in its net profit for the first quarter of 2014 that reached Dh863 million compared to Dh556 million in 2013. Emaar's shopping malls and retail and hospitality and leisure businesses together contributed Dh1.346 billion in recurring revenues during the quarter, nearly 60 per cent of the total revenue and 15 per cent higher than 2013 first-quarter revenues of Dh1.166 billion.