Dubai’s First IPO in Five Years as REIT Seeks $136 Million

Emirates Reit, the United Arab Emirates-based real estate investment trust, will sell shares on Nasdaq Dubai in the first initial public offering in the sheikdom in at least five years.

The company is seeking a minimum of 500 million dirhams ($136 million) for acquisitions and investments, it said in Dubai today. Books will open in two weeks and build over 10 days, according to Karim Schoeib, chief executive officer of investment banking at Shuaa Capital PSC, one of the bookrunners on the deal. Drake & Skull International was the last company to raise funds on one of Dubai’s two stock exchanges, listing in March 2009.

Emirates Reit wants to capitalize on resurgent interest in real estate in Dubai, where economic growth and property prices have rebounded since 2009. Home prices may jump as much as 40 percent this year, according to the emirate’s Land Department and the economy may expand 4.7 percent after recording the fastest growth in six years in 2013.

Nasdaq Dubai, established in September 2005 to encourage international investment into the Middle East, has struggled with a lack of listings and low trading volumes and has 10 companies listed. The Bank of London & The Middle East Plc, the largest Islamic bank in Europe, in October listed on the exchange but didn’t raise any capital.

Liquidity Expected

Emirates Reit, which is based in the Dubai International Financial Center, considered listing on other exchanges but decided on Nasdaq Dubai because “liquidity is coming very soon,” Sylvain Vieujot, the company’s executive deputy chairman, said at a press event. As a Shariah-compliant company focused on investing in Dubai it also made more sense to list in the emirate, he said.

Emirates Reit was established in 2010 by Dubai Islamic Bank PJSC and France-based Eiffel Management to invest in real estate. Its portfolio has a total value of 1.2 billion dirhams, according to the company website. DIB, the world’s oldest Islamic lender, owns 32.4 percent of the company, and Dubai Holding LLC holds about 28 percent through two subsidiaries.

Shuaa and Emirates NBD Capital will act as joint bookrunners on the deal. Abu Dhabi Commercial Bank PJSC, DIB and EFG-Hermes UAE Ltd. are co-lead managers for the sale.

Dubai’s benchmark DFM General Index declined 1.4 percent today.

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