A Saudi real estate business is spinning out its international luxury development operations in London’s first main market listing so far this year.
The new company, DarGlobal, will raise $72mn through a direct listing on the main market in London, which is expected to value the business at about $600mn.
A direct listing works differently from a standard initial public offering by allowing the company’s existing private backers to sell their shares to the public and trade on the exchange rather than issue new stock.
The decision by the company to list in London will be a rare fillip for an otherwise moribund market for IPOs. Stalling economic conditions, the drop in tech valuations and concerns caused by the war in Ukraine have damped investor interest in backing new public companies. According to Dealogic data, there have been no main market listings so far in 2023, and only one in the junior AIM market.
Ziad El Chaar, chief executive of DarGlobal, said: “London [is] the best location for us as we look to access new capital and build our global visibility with development and luxury brand partners.”
London-based bankers say there have been renewed conversations in recent weeks about potential future IPOs in the city, which could lead to more activity in the second and third quarters of this year.
DarGlobal said its shares would be admitted to the standard listing segment of the London Stock Exchange next week.
DarGlobal develops second homes in the likes of Dubai, Muscat in Oman, and the Costa del Sol in Spain. It will hold the international assets of Dar Al Arkan Real Estate, a listed developer in Saudi Arabia. DAARE has built more than 15,000 residential units valued at $8.5bn.
After the direct listing, DAARE will retain a majority shareholding of about 88 per cent in DarGlobal, with the remainder sold to institutional investors.
The DarGlobal board will be led by independent non-executive chair David Hunter, the former president of the British Property Federation who is on the board of several UK-listed real estate businesses including GCP Student Living and Capital & Regional.
Hunter said DarGlobal “will bring a highly compelling business model to the listed real estate sector in the UK”. Liberum Capital acted as an adviser on the listing.
DarGlobal has a portfolio of 11 projects: four in Dubai, three in Spain and one each in Oman, Qatar, Bosnia and the UK. The first three of these — 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 complete in 2025.
The group’s developments have the potential to deliver 5,200 units across six countries with an estimated gross development value of $4.8bn. The company also wants to expand into acquiring or building hotels in Spain, Dubai, Maldives, Athens, Marrakesh and London.