Emaar Properties is considering the flotation of overseas units and its hotels arm to generate more growth capital and to return cash to shareholders.
The company has told investors that it is looking to “monetise core assets” through further initial public offerings of business divisions, such as its Turkish and Indian units, or through the creation of real estate investment trusts (Reits).
A spokesman for the company told The National that creating independent listed companies for individual segments or international arms of its group would “provide the businesses with appropriate financial and operational means to grow faster and become among the most successful companies in their industries”.
He added that the timing of such deals “will be dependent on market conditions”.
The company also filed audited accounts for 2015 on the Dubai Financial Market, which revealed that it paid Dh123.5 million for a 65 per cent stake in Mirage Leisure and Development – a development management company registered in the British Virgin Islands.
Mirage Leisure & Development has been involved with several Emaar projects in the past and is currently working on the US$300m Opera House District for the developer in Downtown Dubai, as well as on Meraas Holding’s $2bn Bluewater Islands project and the $350m Phase IV expansion of Madinat Jumeirah for Jumeirah Group.
The Emaar spokesman said the purchase of its majority stake in Mirage offered “a good fit to Emaar’s strategy of developing premium assets in the property, malls and hospitality sectors”.
“Emaar is developing significantly complex projects, and the acquisition will assist in the timely delivery of quality developments and in optimising project management costs.”
Emaar Properties’ net profit in the fourth quarter of 2015 of $1.03bn was 1 per cent lower than in 2014, despite a 58 per cent uplift in sales to Dh3.8bn.
Full-year profit came in 24 per cent higher at Dh4.1bn on a 33 per cent increase in revenue to Dh13.7bn.
The percentage of sales generated via recurring revenues at its hospitality, malls and retail arm dropped to 42 per cent of the total, from 54 per cent in 2014. However, in absolute terms recurring revenue increased by 8 per cent to Dh5.79bn.
About 39 per cent of sales came from its UAE property development arm, which increased revenue by 67 per cent to Dh5.25bn during the year.
Revenue for its international development arm grew by 46 per cent to Dh2.6bn, but sales at Emaar Hospitality Group declined slightly.
Occupancy dropped by 1 per cent to 82 per cent, and revenue per available room fell by 9 per cent to Dh1,072.
Asjad Yahya, the head of research at Dubai-based Shuaa Capital, said that spinning off business units would be a continuation of a strategy that Emaar began in October 2014 through the listing of the Emaar Malls business and the subsequent flotation of its Egyptian arm, Emaar Misr, last August.
He said that Emaar’s hotels arm is the next-strongest target for a potential IPO. It has four new properties due to open this year – The Address The BLVD in Downtown Dubai and three Rove Hotels being delivered through a joint venture with Meraas Holding.
“I think they’re just waiting for the right time in the market, which is the appropriate thing to do,” said Mr Yahya.
“While a listing in the current market appears unlikely, if the oil price settles around current, or higher levels, and the macro environment stabilises as well, the IPO market could reopen.”