By Staff writer
Mohamed Alabbar made announcement after successful listing of the malls subsidiary raised $1.6bn
Emaar Properties is planning to sell shares in its hotel division in the next few months, the company’s chairman announced just hours after the developer confirmed it had raised up to $1.6 billion by listing its malls unit.
Chairman Mohamed Alabbar made the announcement at the Dubai International Project Management Forum in Dubai on Monday but did not give any further details.
The plans follow the successful initial public offering (IPO) of the company’s malls business, which was priced at the top end of the proposed range, marking another milestone in the return of investor confidence in the Gulf Arab state after the financial crisis.
Shares in Emaar Malls Group (EMG) were allocated at AED2.90 apiece following huge demand, giving an overall sale value of AED5.8 billion ($1.6 billion) and making it the largest stock sale in the Gulf region since 2008.
After years of debt-fuelled expansion, Dubai was hit hard by the global financial crisis and needed a multi-billion dollar cash injection by neighbouring emirate Abu Dhabi.
Several of its largest companies have since undergone painful restructurings, while a pick up in revenue from the core industries of travel and tourism - of which EMG's Dubai Mall is among the biggest draws - has helped to lure investors back.
With a market value of AED37.7 billion upon listing, EMG will become the third-largest stock on the Dubai Financial Market when it begins trading on October 2.
It is the biggest IPO in the Gulf since Saudi Arabian Mining Co (Ma'aden) raised $2.47 billion from its debut on the Saudi stock exchange in July 2008.
The Burj Khalifa developer’s hotel division includes a portfolio of 12 hotels and resorts consisting of over 1,900 rooms. According to figures in April, Emaar’s hospitality & leisure business recorded revenues of AED483 million in the first quarter of 2014. This is 16 percent higher than the Q1 2013 revenue of AED417 million. The flagship The Address Hotels + Resorts reported average occupancy of 92 percent during the first three months of this year.
The company also operates the Vida hotel brand and has a stake in the Armani Hotels & Resorts hospitality brand.
An Emaar spokesperson was not immediately available for comment when contacted by Arabian Business.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.