Why the Emaar development IPO will make money for investors – The Property Chronicle
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Why the Emaar development IPO will make money for investors The latest in UAE property development news

The Macro View

Dubai skyscrapers with palm tree

Emaar Properties will sell 20% of its UAE development portfolio in an initial public offering in November. This is the first IPO in the UAE capital markets in the last three years and follows bellwether offerings such as Emaar Malls and Emaar Misr. Emaar’s Dubai development’s adjusted net value is 24.1 UAE dirhams and I would not be surprised if the post IPO revalues the portfolio to 30 billion AED. The crucial issue for me, as always, is the pricing, valuation and secondary market trading prospects of the IPO. Of course, the rise in Emaar Property’s share price from AED 7 to as high as AED 8.9 after the development IPO was announced in June meant that the optimal strategy was to buy the parent’s shares on the news. However, given that oil prices have doubled since their lows the US dollar index has depreciated 8% in 2017, Emaar’s offplan sales have risen above a 10% amid a stressed secondary market and a de facto bank credit crunch, the fabulous margins in Dubai property development and the potential in Expo 2020, Emaar Development will be a profitable deal for investors upon its listing.

The Macro View

About Matein Khalid

Matein Khalid

Matein Khalid is Chief Investment Officer and Partner at Asas Capital. He is responsible for global investment strategies, merchant banking, and the development of the multi-family office investment platform, advising ultra-high net worth royal and family offices in the UAE on global equities markets and foreign exchange.

Articles by Matein Khalid

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