Emaar to list at least 15% of malls business on DFM

Dubai-based real estate developer Emaar Properties today announced its intention to proceed with the sale of existing shares in Emaar Malls Group (EMG) via an initial public offering (IPO) on the Dubai Financial Market (DFM).

The property giant confirmed in a statement that it “expects to sell at least 15 per cent of EMG” as part of the IPO.

Emaar noted in a media statement today that the offering will be made available to individual investors (30 per cent of the IPO), as well as qualified institutional investors (70 per cent of the IPO), with 10 per cent being targeted for preferential allocation to existing Emaar Properties shareholders as at September 10, 2014.

Emaar Malls Group, the developer of Dubai Mall, the world’s largest mall, recorded revenues of Dh1.25 billion ($340 million) during the first six months of 2014.

This is 13 per cent higher than the H1 2013 revenue of Dh1.106bn ($301m). The Q2 2014 malls revenue was Dh650m ($177m), 11 per cent higher than Q2 2013 revenue of Dh584m ($159m).

In the statement, Emaar said that while valuation of its malls division will be dependent upon the bookbuilding process, the company will earmark approximately Dh5.3bn ($1.44bn) from the IPO proceeds to be paid as a dividend.

This amount aggregated with the dividend received from EMG prior to the IPO of Dh3.7bn ($1.01bn) will allow Emaar Properties to pay a dividend of approximately Dh9bn ($2.45bn) to its shareholders.

“The intention to generate proceeds for Emaar Properties by listing EMG shares on DFM will continue the established trend of returning funds from the Group to shareholders,” said Mohamed Alabbar, Chairman of Emaar Properties.

“This underlines Emaar Properties’ commitment and gratitude to our shareholders for their dedication and loyalty since 1997. Additionally, the IPO of EMG is a milestone for the development of the UAE capital markets as, for the first time, it combines institutional and retail shareholders in the same offering on the DFM. This further demonstrates Emaar Properties pioneering role in the UAE capital markets, having been the first company to list on the DFM in the year 2000,” Alabbar added.

“Emaar Malls Group has delivered strong growth and profitability in the last six years that has enabled it to make substantial investments which are expected to increase its GLA by around one million square feet by 2016 and enhance the group’s revenue and margins. As the owner of EMG, Emaar Properties is excited about the future growth of the group and will do its upmost to ensure that the business continues to flourish in this new stage of its development.”

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