Emaar Malls IPO Central to Dubai’s Retail Ambitions


Visitors stand at the entrance to Bloomingdales at the Dubai Mall.

















Home to some of the world’s largest and most extravagant shopping malls, Dubai in the past decade has established itself as the Middle East’s de facto capital of consumerism. Central to Dubai’s policy of trying to lure shoppers from across the region and beyond stands Dubai Mall, a 12 million square feet spending oasis in the shadow of the world’s tallest building.
Its owner, Emaar Properties, now feels the time is ripe to take advantage of the rising levels of tourism and retail spending in the emirate by listing at least 15% of the business that owns Dubai Mall, details of which were announced earlier on Sunday.
“The malls group is the cornerstone asset within the Emaar Properties Group and partially listing it should crystallize its value on public equity markets,” says Mohammad Kamal, research director at Dubai-based Arqaam Capital.
“[Emaar’s] primary asset- the Dubai Mall – continues to capitalize on rising tourist numbers and consumer retail spending, and the expansion of the mall provides further upside to top line,” says Mr Kamal.
Dubai Mall, which boasts a shark-filled aquarium and ice skating rink, last year attracted around 75 million visitors. The mall accounts for a staggering 50% of all luxury goods sold in Dubai by value in 2013. The Dubai Mall is the largest source of income for Emaar Malls, whose revenues rose 13% to $341 million in the first six months of this year.
Emaar said it intends to sell at least 15% of Emaar Malls on the local Dubai Financial Market. It also plans to distribute around $1.44 billion of the malls’ IPO proceeds to shareholders in the form of a dividend. That is likely to please the government of Dubai which owns 29.2% of Emaar Properties.
According to Emaar, the fair market value of its malls business is estimated to be $10.6 billion. That valuation is based on the mall’s existing business performance and the expectation that shopping will remain an essential part of Dubai’s future thinking.
After a few subdued years since the financial crisis, the emirate continues to spend heavily on expanding its airport, public transport and hotels –investments that are all geared towards attracting more visitors and cementing its reputation as the region’s number one consumer paradise.

0 comments:

Protected by Copyscape DMCA Takedown Notice Checker