Dubai luxury housing firm seeks $500 mln in London listing

Reuters

* DAMAC Properties to sell GDRs in initial share offering

* Would be first property firm to launch IPO since Dubaicrash

* Citigroup and Deutsche appointed joint bookrunners

* Developer aims to list in December

By David French and Praveen Menon

DUBAI, Nov 4 (Reuters) - Dubai luxury housing developerDAMAC Properties said it plans to raise as much as $500 millionfrom an initial public share offer in London, betting on arecovery in a property market that crashed four years ago.

If successful, DAMAC would be the first Dubai real estatefirm to go public since then.

DAMAC, which is building golf courses in the emirate withAmerican real-estate mogul Donald Trump as well as aHollywood-themed residential and retail complex, was one of thefirms hit by a collapse that saw Dubai real estate prices slumpby over 50 percent from their 2008 peak.

The developer, founded in 2002, famously gave away luxuryyachts and Lamborghini cars to customers during the downturn tostimulate sales, but it has now revived stalled projects andannounced new ones as prices rebound.

Residential house prices and rents have risen by more than20 percent in the last 12 months, boosted by confidence in thewider economy, growth in the trade and tourism sectors andDubai's safe-haven status in a region beset by political unrest.

Some, including the International Monetary Fund, have warnedabout a new bubble forming in the market.

But the Dubai government has brought in new regulations todeter speculators, and DAMAC's founder believesthe market is primed for sustainable growth, supported by astrong rental market.

"We think Dubai is in the beginning of a growth cycle.Demand is now (exceeding) supply, which is why rents are goingup," chairman Hussain Sajwani - who will provide all the sharesto be sold to investors - said in a call with Reuters.

About 85 percent of DAMAC's current portfolio is in Dubai,with total assets of $2.3 billion, it said in a stock exchangefiling that was the first public disclosure of its earnings.

Its profit in the first half of 2013 was $332 million, up 40percent on the whole of 2012, while revenue was $631.9 million.

DECEMBER LISTING?

DAMAC expects to list its shares following marketing and atwo-week roadshow, chief financial officer Adil Taqi said on thecall, putting it in or around the first week of December.

Roadshows will take place in London, the Gulf and the UnitedStates, with meetings also possible in mainland Europe, a bankerwith knowledge of the deal said, adding the company wastargeting emerging market funds and regional investors.

DAMAC's IPO has been timed to take advantage of bullishequity markets, Sajwani said, and is the latest Gulf firm tolook to London instead of its home market for a listing.

Gulf share markets have performed strongly in 2013 - Dubai'sbourse is up 80 percent year-to-date - but are regardedas lacking liquidity and interest from institutional investors.

"Our investor base is diversified for (property) buyers sothe investor base will be large for the offering," Sajwani saidwhen asked why he was choosing London over Dubai.

DAMAC will be hoping to emulate other real estate firmswhich have listed in London in 2013 - estate agents Foxtons and Countrywide and housebuilder CrestNicholson, all U.K.-focused companies, are up 35.7,57.4 and 75 percent respectively on their offer prices.

Investors will look to compare DAMAC to state-owned Dubaideveloper Emaar Properties. Its stock is up 62 percentyear-to-date and has a trailing price-to-earnings ratio of 15.9times against 14.3 times for the wider bourse.

Citigroup and Deutsche Bank are jointbookrunners for DAMAC's offering, with the investment bankingarm of Saudi Arabia's Samba Financial Group and VTBCapital acting as co-lead managers.

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