Meraas Holding, the real estate company controlled by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, is said to be planning an initial public offering of its theme park division before the end of the year.
The sale of up to 40 per cent of, Dubai Parks & Resorts, expected to reap at least Dh2.5 billion, will be used to fund the development, including a Legoland, a Hollywood amusement resort and the first Bollywood movie theme park.
The company’s plan to sell shares to the public comes as Dubai’s main stock index more than doubled in the past year-and-a-half amid a recovery of the country’s economy.
That in part has been aided by Dubai’s efforts to restructure debt in the aftermath of the financial crisis of 2008, increased government spending on infrastructure and a rise in tourist visits.
Aided by such attractions as those Meraas is building, the emirate is eager to meet ambitious visitor targets.
Goldman Sachs, HSBC and Emirates NBD are the banks that have been chosen to manage the IPO, two sources said. Bloomberg first reported the news and cited one source as saying that Dubai Parks & Resorts would be listed on the Dubai Financial Market, the emirate’s main bourse. The Egyptian investment bank EFG Hermes is also understood to be helping the sale.
The resurgent UAE economy, which grew by at least 4 per cent last year, and the buoyant stock market, has prompted a number of companies to sell shares to the public, including Emaar, Dubai’s biggest publicly traded real estate company. It plans to start selling shares in its malls group from Sunday. The benchmark DFM General Index has rallied 51 per cent this year, making it the second-best performer in the world after Argentina’s main stock index.
Spokespeople from Meraas, Goldman Sachs, HSBC, Emirates NBD, and EFG Hermes were either not immediately available to comment or declined to talk about the matter.
Ground work on Meraas’s three parks started in February and will eventually form part of a Dh10bn complex of five linked theme parks.
Plans for the theme parks, to be built close to the Dubai 2020 Expo site and the city’s new Al Maktoum airport, were announced by Meraas in 2012 as part of a government push to double annual visitor numbers to 20 million by 2020.
Meraas said that the first phase of development of the Dubai Parks & Resorts project would also include a grand entrance square of shops, restaurants and entertainments dubbed “Riverpark” along with Lapita, a family hotel.
In July, the operator behind Dubai’s Legoland theme park, intended to cater for children aged 2 to 12, said it was on track to be completed by 2016. Under a management contract for the theme park, Merlin Entertainments will receive management fees of US$3 million to $4m a year from 2016 after the park’s opening. Between last year and 2015, it was expected to receive development fees of $2.5m annually.
The Dubai Parks & Resorts mega-project follows a previous attempt by the Dubai Holdings subsidiary Tatweer to build a Florida-style Dh64.3bn Dubailand entertainment complex on the outskirts of Dubai, which it announced in 2003 and was to have included 45 mega- projects.
mkassem@thenational.ae
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