Emaar reveals details of mall arm flotation
Developer expects to return $1.44bn to shareholders from proceeds
Emaar has announced details of its plan to float its shopping malls business on the Dubai Financial Market (DFM).
The firm will offer 30% of the shares in the new business, Emaar Malls Group (EMG), to indivdual investors and 70% to institutions, with 10% being held as a preferential allocation to existing Emaar Properties shareholders.
It said that it intends to float at least 15% of the shares in EMG under the offer.
The business consists of four shopping malls, including the flagship Dubai Mall, and 30 community malls. In total, they cover 5.9mn ft2 and have an approximate occupancy rate of 95%.
The company expects to raise around $1.44bn from the float, with the proceeds being paid to Emaar Properties shareholders as a dividend. Coupled with a dividend of $1bn from EMG prior to the IPO, it said that it expects to return a total of $2.45bn to shareholders.
Mohamed Alabbar, chairman of Emaar Properties, said: “The intention to generate proceeds for Emaar Properties by listing EMG shares on DFM will continue the established trend of returning funds from the group to shareholders.
He added that the business had delivered "strong growth and profitability" over the past six years. In the first six months of 2014, the business generated revenues of $340mn, which was 13% higher than in the same period in 2013.
"Additionally, the IPO of EMG is a milestone for the development of the UAE capital markets as, for the first time, it combines institutional and retail shareholders in the same offering .
"As the owner of EMG, Emaar Properties is excited about the future growth of the Group and will do its upmost to ensure that the business continues to flourish in this new stage of its development.”
It added that it expects to add a further 1mnft2 to EMG's portfolio by 2016 - the bulk of which will come from a $380mn extension to Dubai Mall currently being carried out by Dutco Balfour Beatty.