Dubai Properties has confirmed it intends to launch an IPO to raise part of the funding for the $272.2 billion of real estate projects it has planned in the next five years.
But Yaqoob Al Zarooni, deputy chief executive of the master developer said the company had sufficient existing capital to fund the majority of the investment, as it seeks to double the $136 billion of assets it manages currently.
Al Zarooni was speaking to Arabian Business at the Ritz Hotel in Paris as part of the world exclusive sales launch of Babil, a residential development within the new $13 billion Culture Village project in Dubai.
Dubai Properties is on the second leg of its European sales promotion, with the developer expecting the first 51 properties in the project which have been advertised at London’s prestigious Harrods store since July to be snapped within the next 10 days.
The remainder of the 159 units will then be sold in the UAE.
Al Zarooni said the weakening of the UK economy was encouraging buyers to invest in property in the emirate.
“This is a great opportunity for people in Europe to have the first access to this development before the Dubai market,” he said.
“If we launched the sale of these properties in Dubai they would be sold out within days but like any company we like to diversify.”
Culture Village was the idea of Dubai ruler and Vice President and Prime Minister of UAE, Sheikh Mohammad bin Rashid Al Maktoum, who wants the scheme to celebrate the cultural heritage of the emirate.
Covering over 40 million square feet in the historic district of Jadaf, Culture Village will comprise residential, commercial and retail zones including a Palazzo Versace hotel and resort, an amphitheatre for live performances, museums and galleries displaying local and international art, as well as a shipyard for traditional dhow builders.
Sheikh Mohammad had a direct input in the development, the first phase of which is expected to be complete by 2012, and requested its architecture be based on the design of buildings in the city up to 100 years ago.
Within the project will be the Middle Eastern museum of Modern Art, a 25 square metre eye-catching building with galleries, art shops and auction and an exhibition hall showcasing the works of Arabian artists.
Dubai Properties has also been marketing its $15 billion Mudon project, to be located in Dubailand, which will include five areas based on historic Baghdad, Beirut, Damascus, Cairo and Marrakesh within one large city housing 50,000 residents when it is finished in 2012.
The state-owned company, a subsidiary of Dubai Holding, is managing assets of 500 billion dirhams currently, with it hoping this figure will double to one trillion dirhams in five years.
When asked if the company would launch an IPO, Al Zarooni said yes. He said the developer may decide to list shares for one division of the six companies Dubai Properties is made up of to raise investment for its projects with the rest of the funding coming from existing capital.
“Our company is big, we are managing a total asset of 500 billion dirhams, you cannot IPO a company of that size, so by splitting them into six we might then, for example, IPO the sales and marketing company or the facility management company,” he said.
“We are self-sufficient right now, all the funds come from within as we have lots of money.”For all the latest construction news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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