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Abu Dhabi, UAEMonday 15 October 2018

Sobha wants dual listing to power international expansion  

Luxury Dubai developer plans to enter Europe, Asia and Africa from 2021

Sobha Group founder and chairman PNC Menon said he wants to list the company in London and Dubai to finance global expansion. Chris Whiteoak / The National
Sobha Group founder and chairman PNC Menon said he wants to list the company in London and Dubai to finance global expansion. Chris Whiteoak / The National

Dubai-based real estate developer Sobha Group wants to expand outside of the UAE for the first time in 2021 and will seek to use a dual listing in London and Dubai to finance its growth, according to the company’s founder.

“Our consolidation in Dubai will take around two years and we have the financial capacity to build our brand here, but we also have aspirations to grow internationally,” PNC Menon, who is also Sobha Group’s chairman, told The National in an interview on Tuesday.

Sobha is currently working to double its annual sales volume to Dh2.5 billion by mid-2020, but its new objective is to increase revenue further to Dh10bn per year in the next decade, by tapping into new markets, Mr Menon added.

The developer signed a memorandum of understanding with the Indonesian government this summer to build a residential scheme in Jakarta, and it has also been approached by governments in Africa with a view to build there.

There are also plans to enter Europe, specifically the UK, should the right opportunity arise. “We want to be in London, which for a long time has been the commercial capital of the world,” he said.

An initial public offering, which Mr Menon told The National he was eyeing in March, would help Sobha finance its global expansion plans. The chairman said on Tuesday a dual listing in London and Dubai would help attract capital from a broader range of markets and increase the company’s visibility as it broadens its reach.

“There are lots of benefits of a dual IPO,” he said during the Cityscape Global conference in Dubai. “And while we don’t need an influx of new capital now, we want to grow into a Dh10bn [turnover] company so we will need to increase our presence.”

Sobha Group has a separate entity listed on the Indian stock exchange, but that company only operates in India, while Sobha Engineering and Contracting is a contractor, not a developer, with operations spanning Oman, Bahrain, Qatar, Brunei and India.

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The UAE-based realtor is a luxury residential developer with no international schemes at present. It is building the $4bn Sobha Hartland mixed-use scheme, which launched for sale in 2014 in Dubai’s Mohammed bin Rashid City, and the $8.5bn District One, a residential community near Meydan Racecourse in a joint venture with Meydan Group.

Sobha is also building the $4bn project, Firdaus Sobha, in Umm Al Quwain with the local government.

The company completed a rebranding last month intended to position it for the next phase of growth. “We have always been a rather understated luxury brand,” Mr Menon said.

While property prices in most locations across the UAE have fallen in the wake of a three-year oil price slump, which has squeezed consumer purchasing power and driven a fight for affordability, Mr Menon said the luxury and ultra-luxury segments have been comparatively resilient.

“If you market your property properly, and deliver a high-quality product, there is always demand for luxury,” he said.