BEIRUT

Regional

Emirates REIT to raise $135M in first Dubai IPO since 2009

DUBAI: A real estate investment trust, Emirates REIT, said Tuesday that it planned to raise at least 500 million dirhams ($135 million) in Dubai’s first initial public offer of shares since 2009.

The company will use proceeds from its IPO on the Nasdaq Dubai bourse for possible future acquisitions and investment in existing assets, said Abdullah al-Hamli, chairman of its management board.

The equity listing would be only the second on either of Dubai’s two stock exchanges since 2009; Bank of London and The Middle East, Britain’s largest stand-alone Islamic bank, listed its shares on Nasdaq Dubai last October without raising fresh capital.

Both IPOs and new listings dried up during Dubai’s financial crisis, which erupted in 2009, but stock prices are now soaring – the main Dubai index is up 153 percent since the end of 2012 – and several IPOs are in the pipeline, investment banking sources say.

REITs invest directly in properties and distribute profits as dividends. Shares in Emirates REIT could attract massive interest because they would be a way for small investors to gain exposure to Dubai’s red-hot property market, where residential prices jumped over 20 percent last year and may hit their precrisis peaks next year.

Emirates REIT, which was formed in 2010 as the UAE’s first REIT and complies with Islamic investment principles, appointed Shuaa Capital and Emirates NBD joint book runners for the IPO.

Karim Schoeib, chief executive for investment banking at Shuaa, said an investor roadshow for the offer in Gulf Arab countries and Europe including Britain would start in two weeks.

Current shareholders will not sell their shares in the IPO; new shares will be issued for the offer. The value of the company is not known yet, and the IPO will be conducted through a book-building process, officials said. Nasdaq Dubai IPOs usually sell at least 25 percent of a company.

As of last December, Emirates REIT had 10 properties comprising 1.2 million square feet of net leasable area; its total assets were valued at about $333 million, it said. Net profit climbed to $34.8 million last year from $10.9 million in 2012 and $1.2 million in 2011.

Emirates REIT focuses on properties within Dubai, but its investments may extend to other emirates in the UAE, officials said.

The fund, which now manages assets ranging from school buildings to business towers and retail space, distributed dividends of $5 per share for the 12-month period to Dec. 31, 2012 compared to $2.55 for 2011.

Dubai Islamic Bank owns 30.9 percent of the firm, two units of the Dubai Holding conglomerate own a combined 27.1 percent, Emirates NBD owns 4.5 percent, Egyptian investment bank EFG-Hermes has 4.2 percent and Dubai property developer Deyaar has 3.4 percent.

 
A version of this article appeared in the print edition of The Daily Star on March 12, 2014, on page 5.

Recommended

Advertisement

Comments

Your feedback is important to us!

We invite all our readers to share with us their views and comments about this article.

Disclaimer: Comments submitted by third parties on this site are the sole responsibility of the individual(s) whose content is submitted. The Daily Star accepts no responsibility for the content of comment(s), including, without limitation, any error, omission or inaccuracy therein. Please note that your email address will NOT appear on the site.

Alert: If you are facing problems with posting comments, please note that you must verify your email with Disqus prior to posting a comment. follow this link to make sure your account meets the requirements. (http://bit.ly/vDisqus)

comments powered by Disqus

Advertisement

FOLLOW THIS ARTICLE

Interested in knowing more about this story?

Click here