According to Ernst & Young IPO update for Middle East and North Africa (Mena), companies in the region raised USD 11.5 billion in 2014 through 27 Initial Public Offerings (IPOs), almost four times more than the USD 3 bn raised in 2013 through 25 IPOs. This was the highest amount of capital raised in 2014 since 2008.
Commenting on the report, Hafeez Abdullah, Chairman of ‘The H Holding Enterprise’ says: “We anticipate that regional investors will display stronger preference to investing in “brick and mortar” real estate instead of stocks and shares in 2015; however, the value of capital raised will continue to rise across different sectors, including public real estate companies.”
“The Mena IPO market remains very appetizing for investors, however, small investors still prefer buying real estate because they feel investing in real estate yields higher returns in a short time span,” added Abdullah.
The H Holding Enterprise’ is upbeat about larger inflows of investments into real estate in Dubai, spurred by the rising confidence among investors in lucrative return on investment from property in the short and medium, all the way up to EXPO 2020 and beyond.
“Real estate is now regarded as a sound investment, especially by people with easy liquidity. This helps self-finance the market as investors are now more confident of the direction real estate is taking. There is high optimism fuelled by EXPO 2020 preparations, and property hotspots have expanded to new areas, and not just limited to certain areas of Dubai, as earlier,” added Youssef Jammal, CEO, ‘The H Holding Enterprise’.
In terms of capital expenditure in Dubai, it is projected that EXPO 2020 would involve a cost of around AED 26 bn (USD 7 bn) and a big chunk of that would go toward infrastructure, metro extension, highway infrastructure and telecom expansion.
“The market is very stable and robust, and the steady pace of growth augurs well for the economy as a whole and the property sector in particular, as well as for investors,” said Jammal.