Sources say developer has appointed Deutsche Bank and Citigroup to arrange shares issue
DAMAC Properties, a privately held Dubai property developer, has hired Deutsche Bank and Citigroup Inc to help arrange an initial public offer of its shares in London, two banking sources aware of the matter said.
The company had said in April that an IPO was one of the options being considered for the company's future growth, after Reuters reported DAMAC had reached out to banks with proposals for advisory roles.
A spokesman for DAMAC declined to comment on Tuesday, but reiterated that the company was looking at all future growth possibilities. Deutsche Bank declined to comment, while a spokesman for Citigroup in Dubai was not immediately available for comment.
A London listing by DAMAC would make it the first major property firm in Dubai to conduct an IPO since the emirate's property market collapsed in 2009. IPO plans by family-owned Al Habtoor Group were shelved last year.
Dubai's property market is now recovering after a 60 percent plunge in prices, but it will still be a challenge for a real estate firm from the emirate to sell shares in an overseas market, one of the banking sources said.
"It will be a big achievement if they are able to pull off an overseas listing. Dubai's real estate market is recovering but there is still a lot to be done in the sector before they can venture into an overseas market," the source said, speaking on condition of anonymity as the matter is not public.
The source said the fact that the company had resolved its pending issues with the Egyptian government would help it focus more on the IPO. Egypt said in May that it had settled disputes with DAMAC involving projects dating back to the Hosni Mubarak era, before Mubarak was deposed as Egyptian president in 2011.
Led by Hussain Sajwani, DAMAC symbolised the flamboyance of Dubai's property market during the boom years, handing out sports cars and luxury yachts to customers of penthouses and duplex homes. The developer slowed down during the downturn but has now returned with new projects.
DAMAC, formed in 2002, has completed 37 buildings and has another 66 buildings under construction across the Middle East and North Africa. It recently announced a plan to build a $1 billion development in Dubai in partnership with Viacom Inc's Paramount Group.For all the latest market 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.