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Dubai: Damac Properties, the luxury property developer, is set to list shares on the Dubai Financial Market (DFM), the holding company announced on Wednesday in a statement to the London bourse.
From midday London time on Wednesday, Damac has been offering to convert Damac Real Estate Development Limited (DRED) London-listed Global Depository Receipts (GDRs) for shares that would be listed on Dubai’s main bourse.
Investors will be offered nearly 23.08 shares per GDR, but will not be forced to participate, Damac said in a statement. It added that investors that do not partake will continue to hold the London-listed GDRs. Investors have until September 2 to decide on the offer.
Hussain Sajwani, the founder and executive chairman of Damac, will continue to hold around 85 per cent of the company, according to reports.
“The Offer demonstrates our confidence in our home market of Dubai and our commitment to the DFM,” Sajwani said in the London bourse statement.
The offer is conditional on approval from the DFM.
The listing would be a boost for the Dubai bourse, which has been volatile in the first half of the year amid regional political instability and unsteady share prices.
“It’s a positive thing for the market to have another leading real estate company [listed locally]. The fact that it is a Dubai-based company, will add depth to the market in Dubai and attract some liquidity” as some foreign investors will like to continue holding the shares, Mohammed Yasin, Head of NBAD Securities told Gulf News by phone on Thursday.
Damac has a market capitalisation of nearly $3.5 billion.
“[This] is another key milestone in our history as we offer investors the opportunity to hold Damac shares traded on the DFM,” Sajwani said.
Meanwhile, the Dubai listing is not expected to have an immediate impact on property prices in the UAE.
Craig Plumb, Head of Research at JLL, told Gulf News by phone on Thursday that the listing is not a reason for Damac property prices to increase.
Damac floated the GDRs on the London Stock Exchange in December last year at $12.25 each. The GDRs closed at $16.09 each on the London bourse on Wednesday following the announcement.
First quarter profit
In May, Damac Properties said net profit for the first quarter grew 79 per cent to $210 million largely due to continued economic recovery in its core market, Dubai.
“We continue to see solid levels of demand in the luxury market, which is reflected in the growth in rental levels and residential values. We continue to look for suitable new land parcels ensuring we can provide supply to meet demand,” Sajwani said in May.
In April, the company closed a $650 million sukuk.