Dubai Weighs IPO of Construction Firm ALEC Amid Property Boom – BNN Bloomberg

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(Bloomberg) — Dubai is considering an initial public offering of construction firm ALEC amid a property boom in the emirate that’s pushed commercial and residential real estate prices close to record levels. 

State-backed Investment Corp. of Dubai has held early talks on a potential listing, people familiar with the matter said, asking not to be identified as the information isn’t public. 

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Details of the IPO, such as the size and timing, weren’t immediately available. No final decisions have been made and ICD may still decide against listing ALEC. 

Representatives for ICD declined to comment.

An IPO of ALEC Engineering & Contracting LLC would be the latest by Dubai, which has been selling stakes in state-owned firms for the past two years as part of a push to deepen its capital markets.

The listing spree — which has raised $9 billion since 2021 — matches similar moves in neighboring Abu Dhabi and Saudi Arabia as governments seek funds to diversify their economies away from fossil fuels. The deals have drawn strong demand from both local and international investors, making the region a bright spot for IPOs over the past two years.

ICD acquired ALEC in 2017 from Abu Dhabi-based Al Jaber Group. The company has worked on leisure, airport and commercial projects, among others, according to its website. Its projects also include residential and commercial developments in the United Arab Emirates. 

The potential listing would come amid a rebound in Dubai’s housing market, where prices are closing in on records and rents have surged to unprecedented levels. The turnaround from a years-long slump has been fueled by an influx of wealthy investors, relaxed visa laws and easier job permits.

The city’s commercial real estate market has also boomed. Occupancy is at record highs in contrast to slumping demand in other cities including London and New York.

Read More: Dubai’s Golden Visas Are Helping City Defy Global Office Slump

Still, the emirate’s construction industry has a history of booms and busts. UAE-based Arabtec Holding PJSC was dissolved in 2020 after debts piled up as governments pulled back on spending.

Many construction companies that sprung up more than a decade ago as a building spree swept Dubai and other Persian Gulf countries have since struggled with project delays and thin profit margins.

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