Emaar Properties on Saturday announced plans to list its shopping malls and retail subsidiary, marking one of the largest public offerings in the region since 2008.
Subject to market conditions, Emaar said it will list up to 25 percent of the Emaar Malls Group equity through a secondary offering of shares.
It added that the listing of other Emaar subsidiaries will also be considered “as and when appropriate”.
The announcement comes four months after Arabian Business called for the company to be broken up and different subidiaries listed independently.
The funds raised through the sale – estimated at between AED8-9 billion ($2-2.4 billion) – will be primarily distributed as dividend to the company’s shareholders, the company said in a statement.
Emaar Malls & Retail is one of the high-growth business entities of Emaar, having recorded full-year 2013 revenue of AED2.837 billion, an increase of over 20 percent compared to 2012.
Gross operating profit for the unit increased to AED2.232 billion, compared to AED1.856 billion in the previous year.
Mohamed Alabbar, chairman of Emaar Properties, said: “The proposed listing of Emaar Malls & Retail and the distribution of funds raised through the sale of shares as dividend underlines our commitment and gratitude to our shareholders, including the Government of Dubai, for their unwavering support to the company since its inception in 1997.
“Today, Emaar’s shopping malls and retail subsidiary is our high-performing business, which derives its growth impetus from the sustained growth of Dubai and its reputation as an international business and leisure hub.
“Dubai today is the first choice of destination for more than 2.5 billion people who are less than five hours of flying distance. Our malls business will benefit from the higher growth rate in spending, increased disposal income and economic activity of these emerging markets.”
The Dubai Mall, Emaar’s flagship mall asset, welcomed over 75 million visitors in 2013.
The decision to list Emaar’s Malls & Retail business was proposed at the board of directors meeting of the company.
The board said that listing of various Emaar subsidiaries, with a view to creating independent companies with their own growth strategies and management structures, was imperative to achieve Emaar’s long-term growth strategies.
In the future, listing of other relevant subsidiaries will also be considered as and when appropriate.
Emaar’s malls assets include The Dubai Mall, Dubai Marina Mall, Souk Al Bahar and Gold & Diamond Park. The Dubai Mall’s 1,200 plus retail outlets recorded a 26 percent rise in sales during 2013 compared to the previous year. According to market estimates, more than 50 percent of all luxury goods sold in Dubai are purchased at the mall.
Emaar said it is enhancing the fashion and lifestyle choices at the mall with the expansion of its Fashion Avenue by another 1 million sq ft, which will add 150 new brands to the mall.
Separately, Emaar’s board has proposed the distribution of a cash dividend of 15 percent of the company’s share capital for the year 2013 as well as 10 percent bonus shares to shareholders.
The proposal was put forth at a meeting of the Board, which also discussed the company’s growth strategy for the current year. It will be submitted for approval by the shareholders at the company’s Annual General Meeting in April.
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