Emaar Properties Weighs $3.2 Billion Buyout of Listed Unit Emaar Development

Emaar Properties holds just over 79% of Emaar Development, according to Gulf News' account of the Bloomberg report. Buying out the remaining shareholders could cost the parent up to $3.2 billion at current market prices. Gulf News put Emaar Development's market value at more than $15 billion. Bloomberg's headline described the business as a $14 billion construction arm.

An announcement could come within days, the people said. Talks are continuing, though, and Emaar has not decided on the structure or the price. It could also decide not to go ahead. Representatives for Emaar Properties declined to comment.

Emaar Development shares rose as much as 11.5% after the report. It was the stock's biggest intraday gain since early April, Gulf News said. The shares are still nearly a third below where they traded before the Iran war began.

Why Full Ownership Matters

Emaar Development is the group's residential arm. Owning all of it would give Emaar Properties more control over the cash that business generates. That money could go towards international expansion, assets that produce recurring income, or dividends for shareholders. Analysts at CI Capital said a deal could bring strategic benefits but that financing costs and timing would matter, Gulf News reported.

The report follows Emaar Properties' announcement more than a month ago that it was evaluating proposals to create value for shareholders. The company took legal and financial advice on the proposals and is due to review them at a board meeting this week. JPMorgan analysts had earlier listed several possible routes. They included buying the rest of Emaar Development, buying its residential leasing portfolio that is still under construction, and pursuing mergers, acquisitions or spinoffs elsewhere in the group.

A Familiar Playbook

Emaar has done this before. In 2021, Emaar Properties took Emaar Malls private through an all-share deal and brought the shopping mall business back under full ownership. Emaar Development itself listed in Dubai in 2017, raising about $1.3 billion in what was then one of the UAE's largest initial public offerings.

The deliberations come after a change in Emaar's ownership. In May, a company controlled by Dubai's ruler acquired a $6.5 billion stake in Emaar Properties from the emirate's main investment vehicle.

They also come as Dubai's property market absorbs the economic effects of the Iran war. Investor sentiment has weakened, but the emirate still recorded its second-strongest first half for housing market activity, helped by population growth, according to the UAE central bank.

A buyout would take one of Dubai's larger listed developers off the market just as the DFM tries to rebuild its listings pipeline. The UAE has had only one IPO so far this year.