Dubai's Emaar plans $2.5 billion listing of shopping mall unit

Sat Mar 15, 2014 11:37am EDT
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By Andrew Torchia and David French

DUBAI (Reuters) - Dubai's Emaar Properties said it would sell up to 25 percent of its shopping mall and retailing unit in a public offer expected to raise 8 to 9 billion dirhams ($2.18-$2.45 billion), making it one of the region's largest equity offers since 2008.

The proceeds "will be primarily distributed as dividend" to Emaar shareholders, Dubai's biggest listed real estate developer said in a statement on Saturday, without giving a timetable for the offer. The shares to be sold will come from the unit's current equity.

Dubai-listed Emaar's flagship mall is the Dubai Mall, one of the largest in the world, which it says attracted more than 75 million visitors in 2013. The company also built the Burj Khalifa in Dubai, the world's tallest building.

The listing plan underlines Dubai's recovery from its financial crisis, which erupted in 2009. Before the crisis, Emaar talked about listing its shopping mall operations but was forced to put the plan on hold as the emirate's real estate and stock markets collapsed.

Both markets are now rebounding strongly on the back of inflows of foreign money, with residential property prices up over 20 percent last year and Dubai's main equity index rallying about 140 percent since the end of 2012.

Emaar is 31 percent-owned by the Dubai government, which is set to earn a dividend of about $750 million from the listing - an important windfall since Dubai and its government-related firms face tens of billions of dollars of debt maturities in the next few years, a legacy of the crisis.

The malls and retailing unit posted revenue of 2.8 billion dirhams last year, up over 20 percent from 2012, while its gross operating profit increased 20 percent to 2.2 billion dirhams, Emaar said. The company's total revenues last year were 10.3 billion dirhams.

More than 55 percent of the company's revenues currently come from its shopping malls and retail, hospitality and leisure, and international operations, Emaar said, indicating that more subsidiaries would be listed eventually.   Continued...

Flags for property company EMAAR, builders of Burj Dubai the world's tallest tower, are seen in Dubai, November 27, 2009. REUTERS/Steve Crisp