Dar Al-Arkan Properties eyes IPO launch by Q2, says Al Shelash

Dar Al-Arkan Real Estate Development Co. is looking to launch Dar Al-Arkan Properties initial public offering (IPO) by Q2 2018, Yousef Al-Shelash, chairman of the real estate developer, told CNBC Arabia on Sunday.

The share sale, however, is subject to regulatory approvals and favorable market conditions.

"In case the offering took place at this point, it will likely generate solid profit for Dar Al-Arkan in H1 2018 with strong returns between 20 percent and 25 percent of the new company's total assets," Al Shelash added.

The IPO will also raise strong liquidity for Dar Al-Arkan and enable it to expand in the development of income-generating assets, thanks to the newly-established entity, which will be able to borrow funds, grow and pay permanent dividends.

Development of income-generating assets is the new company's core business, Al-Shelash said, adding that Dar Al-Arkan Properties has built a solid real estate portfolio over the last years.

The new firm will benefit from the position of such assets. It will capitalize on independence of the income-generating property management and will also have a strong financial position, which may help it get a high credit rating.

Al-Shelash said that the value of the new company's assets worth SAR 2.6 billion is held by Dar Al-Arkan, represented mostly by income-generating property.

In addition, the Saudi-listed developer owns several plots of lands, which can be developed for its main projects – including lands in Shams Arriyadh project and Jeddah.

The new firm is expected to develop such lands for commercial purposes, he added.

Dar Al-Arkan's board of directors approved last week to float a 30 percent stake in Dar Al-Arkan Properties in an IPO, Argaam reported.

Samba Capital was appointed as financial adviser for the planned offering.