A Saudi real estate business has been spinning out international luxury development operations through one of the largest listings in London so far this year.
The new company, DarGlobal, will raise $72m through a direct listing on the main market in London, which is expected to value the business at about $600m.
Direct listings can differ from standard initial public offerings by allowing private providers of existing companies to sell shares to the public and trade them on exchanges instead of issuing new shares.
The decision by the company to list in London will be a rare fillip for the otherwise moribund market for IPOs. The combination of the stalling economic situation, the slump in technology valuations and concerns caused by the war in Ukraine has dampened investor interest in backing new public companies.
Ziad El Chaar, chief executive of DarGlobal, said: “London [is] the best location for us as we want to access new capital and build global visibility with development partners and luxury brands.
The London-based banker said there had been renewed chatter in recent weeks about a possible upcoming IPO, which could lead to more activity in the second and third quarters of this year in the city.
DarGlobal said the shares will be admitted to the standard listing segment of the London Stock Exchange next week.
DarGlobal is developing second homes in Dubai, Muscat in Oman, and Costa del Sol in Spain. It will hold the international assets of Dar Al Arkan Real Estate, a registered developer in Saudi Arabia. DAARE has built more than 15,000 housing units worth $8.5 billion.
After the live listing, DAARE will retain a majority stake of around 88 percent in DarGlobal, with the remainder sold to institutional investors.
DarGlobal’s board will be chaired by independent non-executive chairman David Hunter, former president of the UK Property Federation who sits on the boards of a number of UK-listed real estate businesses including GCP Student Living and Capital & Regional.
Hunter said DarGlobal “will bring a highly compelling business model to the registered real estate sector in the UK”. Liberum Capital acted as advisor on the listing.
DarGlobal has a portfolio of eleven projects, four in Dubai, three in Spain and one each in Oman, Qatar, Bosnia and the UK. The first three, Urban Oasis by Missoni and DaVinci Tower by Pagani in Dubai, and Sidra in Bosnia, are expected to be completed this year, with W Residences Dubai expected to be completed in 2025.
The group’s development has the potential to deliver 5,200 units across six countries with a gross development value of $4.8bn. The company also wants to expand by acquiring or building hotels in Spain, Dubai, Maldives, Athens, Marrakesh and London.