#Dubai Investments Seeks to Ride Real Estate Boom With Unit’s IPO - Bloomberg

Dubai Investments Seeks to Ride Real Estate Boom With Unit’s IPO - Bloomberg

Dubai Investments PJSC is in talks with banks to list a unit that operates one of the emirate’s largest mixed-use real estate developments, seeking to capitalize on surging property demand.

The firm is likely to sell up to a 25% stake in Dubai Investments Park Development Co. by February, Chief Executive Officer Khalid Bin Kalban said in an interview. “We will use the proceeds to expand, and we have plans for other parks,” he said.

Dubai Investments Park could be valued in the range of about 8 billion dirhams ($2.2 billion) to 10 billion dirhams, according to people familiar with the matter, who asked not to be identified discussing private information. Bin Kalban declined to comment on the valuation.

Shares of Dubai Investments rose as much as 4.9% on Friday, marking the biggest intraday rally in six months and taking gains this year to more than 36%.

The 2,300-hectare (8.9-square miles) Dubai Investments Park, which includes industrial, commercial and residential zones, has an occupancy rate above 90%, Bin Kalban said. “We have lease agreements with dozens of firms, with potential for rental growth.”

The city’s property market has been surging, driven by foreign buyers drawn by liberalized visa rules and growing end-user demand. Home prices are up more than 70% over the past four years, fueling a broader construction boom.

Dubai Investments, which holds stakes in about 30 companies across manufacturing, real estate and financial services, has also benefited. Investment Corporation of Dubai is its largest shareholder.

The real estate boom has also sparked a wave of listings. In May, an investment vehicle controlled by Dubai’s ruler raised $584 million through the initial public offering of a residential real estate investment trust. It also plans to list its retail property portfolio. ALEC Engineering & Contracting LLC and Arabian Construction Co. are also preparing IPOs in the United Arab Emirates, as is online property platform Dubizzle, Bloomberg News has reported.

Bin Kalban said Dubai Investments is also considering strategic investors and private placements. Other subsidiaries, including Emirates Glass LLC and district cooling provider Emicool LLC, may be listed in the coming years once they expand further.

Established in 1997, Dubai Investments Park is home to more than 160,000 residents and includes warehouses, hotels, retail outlets, schools and medical centers. It is located near Al Maktoum International Airport, which is undergoing a $35 billion expansion.