Dubai Real Estate's Key Test, Saudi Arabia Hikes Oil Prices, Turkey Inflation - Bloomberg
Dubai’s property sector is set to be in the spotlight again with the expected IPO of a key business park operator.
Dubai Holding’s Tecom Group, home to 7,500 companies, may announce its intention to float this week. Bankers describe the IPO as a key test of whether Dubai has truly drawn a line under its devastating 2009 crash.
Real estate investors in Dubai have endured some rough years after being hit by several delistings, including that of the malls business of Emaar Properties, the largest developer in town.
But Tecom’s listing also coincides with a jump in prime real estate prices in the city. Buoyed by Asians escaping lockdowns to Russians parking their money since the invasion of Ukraine, Dubai’s high-end property rose 56% in 2021, outperforming global hubs such as San Francisco and London.
The potential IPO’s timing also seems auspicious: Dubai is in the middle of a push to boost trading volumes and increase liquidity on its exchange, which has been lagging regional rivals in recent years. When Dubai announced the Tecom share sale, it said the IPO was part of a plan to boost the size of the local market to 3 trillion dirhams.
The Gulf IPO market remains buoyant thanks to high oil prices, while global markets struggle. Share sales in the region have raised $13.4 billion in the first five months of the year, already eclipsing the amount raised in any other first half, data compiled by Bloomberg show.
Still, Tecom may face a tougher sell than for example DEWA, the power and water utility that successfully listed in April, given Dubai real estate’s boom-and-bust history that began with the 2009 property crash.
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