Dubai Holding, one of Dubai's leading investment institutions, is planning to spin off its residential and commercial real estate assets and list them separately. The plan aims to capitalize on the continued boom in Dubai's real estate market.

Photo credit: Gulf Times

Spin-off plans and progress

Dubai Holding plans to package its commercial assets, including shopping malls and others, into a single listed entity, while consolidating its residential property portfolio into a real estate investment trust (REIT), sources said. The REIT is expected to be listed on the Dubai Stock Exchange in early 2025, with the commercial assets to follow.

The exact structure, timing and valuation of this scheme has not yet been finalized. A number of leading financial institutions have been involved in the preparations, including Emirates National Bank Capital Management, Morgan Stanley and Citigroup, as well as HSBC Holdings and JPMorgan Chase, which are responsible for the listing arrangements for the different assets, respectively.

Asset size and background of Dubai Holding

Dubai Holding has an asset base of Dh265 billion (approximately US$72 billion) and operates in a variety of sectors including luxury hotels, theme parks and real estate development. Recently, the holding company consolidated and renamed the 40,000 residential assets it owns, a move that is thought to pave the way for a soon-to-be-listed residential trust.

Over the past few years, Dubai Holding has taken over state-owned developers Nakheel and Meydan and further strengthened its leadership position in the real estate sector.

Market Background and Opportunities

The Dubai real estate market is experiencing an unprecedented boom. Prices in Dubai have risen for 17 consecutive quarters due to low tax policies, a liberal visa regime and the attraction of high net worth individuals. Demand for office leasing also continues to climb, providing a good time to list commercial assets.

Meanwhile, Dubai is accelerating the pace of capital market development. In recent years, a number of state-owned and private companies have successfully gone public, such as high-end supermarket chain Spinneys and the Middle East subsidiary of Delivery Hero. Dubai Holding's plan will certainly add to this trend.

Outlook and implications

If the residential and commercial assets are successfully listed, Dubai Holding will not only provide investors with a diversified range of investment opportunities, but will also further promote the integration of Dubai's real estate and capital markets. This initiative marks a new step towards Dubai's goal of becoming an international financial center.