JEDDAH, 8 February 2004 — A Saudi group has invested over SR2.5 billion in Amlak Finance, a premier property finance company in the United Arab Emirates. Aaid Al-Qahtani, chairman of Al-Oola Development Group, said his company purchased shares in the UAE firm as part of efforts to strengthen Amlak’s position in the Gulf market.
The UAE company announced recently that the share allotment process for its AED412.5 million Initial Public Offering (IPO) has been completed on a pro rata basis. Each subscriber will receive 3.03 shares for every 100 shares that they had subscribed to, the company said.
The Amlak Finance Founders Committee approved the share allotment ratio for its IPO that received an overwhelming response from investors.
“This reflects high investor confidence in Amlak and the UAE’s strong position as Middle East’ financial center,” said Mohamed Ali Alabbar, chairman of Emaar Properties and Amlak Finance.
The success of the IPO also means that Amlak is now seen as a major force in the Islamic finance sector.
Emphasizing the recent decision to convert the company into an Islamic financial institution, Alabbar said: “The IPO clearly demonstrates that there is huge demand for exposure to this sector in a Shariah compliant manner and validates the acceptance of Islamic finance by investors and the financial community.”
The company collected 13.6 billion dirhams within 10 days of opening in January 2004. A total number of 17,241 investors subscribed to the IPO with 64 percent of the subscribers being UAE nationals, 31 percent being GCC nationals and five percent being expatriates resident in the UAE.
Amlak will be traded on the Dubai Financial Market immediately after the final allocation of shares. Established in October 2000, Amlak Finance is the first financial services company in the region to specialize in the provision of mortgages.
The company is majority owned by Emaar Properties, which was founded as a public company in 1997 with the goal of becoming the region’s leader in property development and management of both commercial and residential property.
Real Estate Projects
Saudi investors are expected to put nearly SR17 billion in real estate projects within the next few months, Al-Eqtisadiah reported yesterday quoting market analysts.
The projects include: Shubaily High-rise One belonging to Khaled Saud Al-Shubaily Group; the Zamrad project of the Aflad company, a tower project of Al-Oola group; the Zahrat Al-Yasmin project, north of Riyadh, belonging to Hamad Al-Qasim; and Al-Rehab project of Al-Saeedan group, northeast of the capital.
Bank Finance
Saudi banks intend to offer loans worth SR2 billion to finance purchase of plots and housing units by individuals during the first quarter of the next Hijrah year (1425), Al-Eqtisadiah business daily reported yesterday quoting banking sources. They said part of the amount would be given to finance new housing plans. Saudi Arabia witnessed an unprecedented real estate boom last year with prices going up 150 percent, the paper said.