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Mon 21 Mar 2016 09:03 AM

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Emaar mulls IPOs for international, hotel divisions - report

Dubai developer considers listing Turkish, Indian units, as well as setting up real estate investment trusts

Emaar mulls IPOs for international, hotel divisions - report
(AFP/Getty Images)

Emaar Properties may list overseas units and its hotel division in a bit to generate more growth capital and return cash to shareholders, the National has reported.

The newspaper said that the Dubai developer has told investors that it is looking to “monetise core assets” via initial public offerings (IPOs) of some divisions, such as its Turkish and Indian units, or through the creation of real estate investment trusts.

An Emaar spokesman told the National that, if carried out, the move would “provide the businesses with appropriate financial and operational means to grow faster and become among the most successful companies in their industries”.

The spokesperson also said that the timing of any such listing would be “dependant on market conditions”.

In 2014, Emaar listed its malls unit in what was at the time the largest IPO seen on the Dubai Financial Market since 2007, raising $1.58 billion.

The developer’s Egyptian unit, Emaar Misr, went public on the Cairo Stock Market in July last year.

Emaar reported near-flat quarterly net profit in the fourth quarter after taking a write-down related to a fire at one of its hotels on New Year's Eve.

The $82 million write-down stalled an earnings boom at the government-linked developer, which had reported rising net income in the preceding 10 quarters.

Emaar made a net profit of AED1.03 billion in the three months to Dec. 31, down from AED1.05 billion dirhams a year earlier, a bourse statement said.

Michael Alan Barry 3 years ago

It is worth noting that whilst The Address and associated brands are successful within Dubai, plans to expand / create a management company never happened. The hospitality portfolio generates a comparatively small annual profit and therefore is an IPO at this time the correct course of action both for Emaar and the shareholders. Similarly, international failed to deliver upon the promises made and unfortunately the various international operations were unable to replicate the success of the parent company as witnessed in Dubai. With regard to the successful Malls IPO, what have they done with the money? Whereas Futtaim etc have ambitious plans to expand to markets such as Saudi and Egypt, Emaar Malls Group are spending money expanding their main asset. All of their eggs in one basket?

One Guy 3 years ago

@Michael, very true. The worst of it is that the IPO money for the Malls was nothing more than a money grab as it was used as a massive dividend for shareholders, not expansion.