Dubai's Damac said it raised $348m from its London share offer on Tuesday, a lukewarm response to the first share sale by a Dubai property firm since the emirate's real estate crash four years ago.
The luxury housing firm, which describes its new villa project as the Beverly Hills of Dubai, had hoped to take advantage of a renewed interest in Dubai's property market aided by an overall recovery in the emirate's economy.
However, the company originally aimed to raise $500m in London with the sale of global depositary receipts (GDRs). The deal size was later reduced to $400m last week and the final price was fixed at $12.25, at the bottom of the price range.
The Dubai developer sold 28.39 million shares, valuing the firm at $2.65bn, it said in a bourse filing.
Property prices in Dubai plunged over 50 percent during the crash as a bubble burst, but the real estate market has staged a recovery and residential prices have rebounded over 20 percent, aided by growth in Dubai's trade and tourism sectors.
Damac's offering could increase to $400m if a greenshoe or over-allotment option for an extra 15 percent of the offer size is exercised, the statement added. Should this option be activated, 15 percent of the company would be listed.
The company and the selling shareholders have committed to a lock-up period of one year from admission.
Citigroup Inc and Deutsche Bank are joint bookrunners for Damac's offer, with the investment banking arm of Saudi Arabia's Samba Financial Group and VTB Capital acting as co-lead managers.
London has seen a revival in IPO activity this year as confidence has returned on the back of booming equity markets, with more firms going public there by mid-November than in the same period of any year since 2007, according to Thomson Reuters data.
However, the stock market rally has stalled in recent weeks, and that has affected IPOs. Italian freight-forwarding company Savino del Bene extended its Milan share sale process on Monday, while Austrian packaging group Constantia Flexibles cancelled a planned stock market debut after investor demand fell short of expectations.
Shares in the last company to have floated in London, Just Retirement, closed on Monday at £2 per share, having never closed above its November 12 initial public offer price of £2.25.
Dubai tenants can report 'illegal' utility disconnection to police
Dubai’s Rental Disputes Centre judge says seek compensation...
Abu Dhabi real estate: Down, but not out
While there has been evidence of rents in the richest emirate...
UAE firm to bring 'artificial skylight' concept to the MidEast
CoeLux is an optical system which artificially reproduces...
Damac signs deal to build more Paramount movie hotels
Dubai developer and Hollywood studio expands agreement to...
Dubai's Damac raises $348m in London share sale
Lukewarm reaction to the first share sale by a Dubai property...
Dubai may not see Expo benefits until 2015 - analyst
Expo-related spending seen taking up to 2 years to ramp...
Dubai Expo 2020 loss could hit property market
Report says that real estate investors have “gambled” on...