Dubai developer Emaar to list malls and retail unit amid Dh15bn shareholder payout

Emaar Properties, the Dubai-based developer, says it will list shares in its retail and malls division in one of the biggest capital raising exercises ever seen in the emirate.

The share issue, which is still in the planning stage, will be part of a big payout to investors by the company, which has seen the value of its stock rise significantly on the back of recovering property markets in the UAE and the surge in local equity markets.

With a 15 per cent cash dividend and 10 per cent bonus share issue for 2013 – also announced yesterday – and the proceeds of the proposed share listing, Emaar, under its chairman, Mohamed Al Abaar, will pay out a total of Dh15 billion to shareholders over the next year or so.

Details of the share listing are still being finalised. Investment banking advisers have not been appointed, and no decision has been taken on where the new equity will be listed.

Some 25 per cent of the retail and malls unit will be offered with a value of up to Dh9bn, the company said.

“The Board decided that listing of various Emaar subsidiaries, with a view to creating independent companies with their own growth strategies and management structures, was imperative to achieve Emaar’s long-term growth strategies. Emaar Malls and Retail has been identified as the first subsidiary to be listed in view of its significant size, growth opportunity set and the maturity of the business. In the future, listing of other relevant subsidiaries will also be considered as and when appropriate,” Emaar said.

Emaar’s shares are currently quoted on the Dubai Financial Market, where it is the biggest company by market capitalisation with a value of Dh56bn.

Its shares are trading 13 per cent higher since the start of this year.

A person familiar with the situation, who declined to be quoted because the matter is at an early stage, said “all options are open” with regard to the location of the listing.

The planned new listing will take a minimum of six months to prepare, he added.

Damac, the Dubai developer with a similar industry profile to Emaar, recently raised about US$350m through a listing of global depository receipts (GDRs) on the London Stock Exchange, the same person pointed out.

There would, however, be strong pressure to keep any listing by Emaar on a local exchange. The company has long been regarded as a leader in the Dubai business scene, and is the force behind some of Dubai’s most successful developments, such as Burj Khalifa and Downtown projects.

Investment Corporation of Dubai, the government’s biggest investment vehicle, owns a 31 per cent stake in Emaar.

The retail and malls division is one of the most profitable parts of the Emaar business and helped boost revenues last year as 75 million visitors flocked to The Dubai Mall – 15 per cent more than in 2012. Emaar’s malls and retail unit’s gross operating profit for last year increased to Dh2.23bn compared with Dh1.85bn in 2012. That unit and the company’s hospitality and leisure business unit contributed 46 per cent of total revenues last year of more than Dh10bn.

“The proposed listing of Emaar malls and retail and the distribution of funds raised through the sale of shares as dividend underlines our commitment and gratitude to our shareholders, including the Government of Dubai, for their unwavering support to the company since its inception in 1997,” said Mr Al Abbar. “Dubai today is the first choice of destination for the more than 2.5 billion people who are less than five hours of flying distance. Our malls business will benefit from the higher growth rate in spending, increased disposal income and economic activity of these emerging markets.”

With a significant gross leasable area of more than 5.8 million square feet in Dubai, Emaar’s malls assets include The Dubai Mall, Dubai Marina Mall, Souk Al Bahar and the Gold & Diamond Park. The Dubai Mall’s retail outlets recorded a 26 per cent rise in sales last year compared with 2012, the company said. According to market estimates, more than 50 per cent of all luxury goods sold in Dubai are purchased at the mall, Emaar said.

fkane@thenational.ae

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