DUBAI Emaar Properties EMAR.DU, the builder of the world's tallest tower, plans to offer up to 30 percent of its United Arab Emirates real estate development business in what would be the first listing on the Dubai exchange in two and a half years.
The developer, whose interests span hotels, entertainment and shopping mall operations, said the decision to list in Dubai would maximize value for shareholders, and is in line with its strategy to make its businesses separate listed companies.
The company floated Emaar Malls in 2014, valuing the business at 37.7 billion dirhams ($10.27 billion).
"As Emaar's other businesses have grown and expanded, we wanted to ensure that investors who value the UAE Real Estate Development business the most, the foundation of Emaar’s success, can do so directly," Emaar's chairman Mohamed Alabbar said in a statement published on the Dubai bourse's website.
"This will ensure that the value of this business is properly recognized."
If successful, the UAE real estate development business will be the DFM's first new listing in two and a half years. The last IPO on the DFM was by DXB Entertainments (DXBE.DU), which began trading in December 2014.
The decision to hive off the unit came after an internal review of Emaar's asset values, Emaar said.
Subject to market conditions, funds raised through the sale of equity would be distributed to shareholders of Emaar Properties, it added.
"What he's trying to do is realize the future value of this company now," said Mohammed Ali Yasin, CEO of Abu Dhabi's NBAD Securities.
"What he is saying is that Emaar in parts is worth more than the sum of those parts in one share," he added.
Alabbar had promised shareholders "special dividends" in 2017 at Emaar's annual general meeting in April, Yasin said.
The company said in April that its hospitality unit will be listed at an appropriate time depending on business requirements and market conditions.
(Reporting by Hadeel Al Sayegh; editing by Louise Heavens)