* DAMAC Properties to sell GDRs in initial share offering
* Would be first property firm to launch IPO since Dubai
* Citigroup and Deutsche appointed joint bookrunners
* Developer aims to list in December
By David French and Praveen Menon
DUBAI, Nov 4 Dubai luxury housing developer
DAMAC Properties said it plans to raise as much as $500 million
from an initial public share offer in London, betting on a
recovery in a property market that crashed four years ago.
If successful, DAMAC would be the first Dubai real estate
firm to go public since then.
DAMAC, which is building golf courses in the emirate with
American real-estate mogul Donald Trump as well as a
Hollywood-themed residential and retail complex, was one of the
firms hit by a collapse that saw Dubai real estate prices slump
by over 50 percent from their 2008 peak.
The developer, founded in 2002, famously gave away luxury
yachts and Lamborghini cars to customers during the downturn to
stimulate sales, but it has now revived stalled projects and
announced new ones as prices rebound.
Residential house prices and rents have risen by more than
20 percent in the last 12 months, boosted by confidence in the
wider economy, growth in the trade and tourism sectors and
Dubai's safe-haven status in a region beset by political unrest.
Some, including the International Monetary Fund, have warned
about a new bubble forming in the market.
But the Dubai government has brought in new regulations to
deter speculators, and DAMAC's founder believes
the market is primed for sustainable growth, supported by a
strong rental market.
"We think Dubai is in the beginning of a growth cycle.
Demand is now (exceeding) supply, which is why rents are going
up," chairman Hussain Sajwani - who will provide all the shares
to 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 exchange
filing that was the first public disclosure of its earnings.
Its profit in the first half of 2013 was $332 million, up 40
percent on the whole of 2012, while revenue was $631.9 million.
DAMAC expects to list its shares following marketing and a
two-week roadshow, chief financial officer Adil Taqi said on the
call, putting it in or around the first week of December.
Roadshows will take place in London, the Gulf and the United
States, with meetings also possible in mainland Europe, a banker
with knowledge of the deal said, adding the company was
targeting emerging market funds and regional investors.
DAMAC's IPO has been timed to take advantage of bullish
equity markets, Sajwani said, and is the latest Gulf firm to
look to London instead of its home market for a listing.
Gulf share markets have performed strongly in 2013 - Dubai's
bourse is up 80 percent year-to-date - but are regarded
as lacking liquidity and interest from institutional investors.
"Our investor base is diversified for (property) buyers so
the investor base will be large for the offering," Sajwani said
when asked why he was choosing London over Dubai.
DAMAC will be hoping to emulate other real estate firms
which have listed in London in 2013 - estate agents Foxtons
and Countrywide and housebuilder Crest
Nicholson, 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 Dubai
developer Emaar Properties. Its stock is up 62 percent
year-to-date and has a trailing price-to-earnings ratio of 15.9
times against 14.3 times for the wider bourse.
Citigroup and Deutsche Bank are joint
bookrunners for DAMAC's offering, with the investment banking
arm of Saudi Arabia's Samba Financial Group and VTB
Capital acting as co-lead managers.