UPDATE 2-Dubai's DAMAC gets muted response for London share sale | Reuters

UPDATE 2-Dubai's DAMAC gets muted response for London share sale | Reuters:

"DAMAC sells 28.39 mln GDRs at $12.25 each

* Dubai firm valued at $2.65 bln post offering

* DAMAC initially planned to raise $500 mln from sale

* Property market in Dubai recovering from crisis

By Praveen Menon and David French

DUBAI, Dec 3 (Reuters) - Dubai luxury real estate developer DAMAC got a lukewarm response to its share offering in London on Tuesday, a sign that international investors are still wary of the emirate's property market despite a recent recovery in prices.

Property prices in Dubai have rebounded by over 20 percent this year having slumped more than 50 percent from a 2008 peak when a real estate market crash sparked a debt crisis.

But some analysts have said the recovery has been driven by speculative buying, with the International Monetary Fund warning of another possible bubble.

DAMAC, which gave away yachts and sports cars to buyers of its luxury properties during the downturn, said it raised $348 million from the sale of 28.39 million global depositary receipts (GDRs). It had originally hoped to raise $500 million but reduced the size last week, with the final price set at $12.25 per GDR - bottom of the initial range."

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