DAMAC Properties is considering launching an initial public offering(IPO) on the stock market. The Dubai privately-owned developer has approached banks including HSBC, Deutsche Bank, Morgan Stanley and Goldman Sachs with proposals for advisory roles that may be related to the type of listing and the exact timing. The company bets on the ongoing modest recovery in the Dubai’s real estate market.
According to sources familiar with the plan, but speaking on condition of anonymity as the matter is not public yet, the property developer has submitted requests to a number of international banks.
Talks about new IPOs have circulated in the local market during the past year whiteout much of success. If the plan of DAMAC materializes soon, the company would become the first major real estate developer in the United Arab Emirates to launch an initial public offering (IPO) since the property market collapsed in 2008.
An IPO by a large Dubai-based company would shake the regional equity markets. The last listing on the Dubai Financial Market index was in March 2009, while the Abu Dhabi bourse has seen only a couple of minor sales since 2008.
The IPO plan is at an initial stage and it was not yet clear whether the listing was planned in Dubai or as a dual listing in another international market, as for example London. No details on the potential valuation for the business was available.
DAMAC said a potential IPO is one of the options considered for the company’s future growth but gave no additional details.
Dubai’s property market is in a process of recovery, after a 60% and even for some properties 80% decline in prices drove investors away since the beginning of the global financial crisis.
DAMAC is one of the biggest developers in Dubai, along Emaar Properties and Nakheel. Emaar shares advanced significantly since the beginning of 2012 to almost double in value on the back of increased revenue from hospitality and retail businesses.