Masood Al Awar has an interesting analogy for an initial public offering (IPO): he describes it as being like a wedding night. As the CEO of Tasweek Real Estate Development and Marketing, which is set to launch a AED1bn ($272m) IPO in the fourth quarter later this year, does that then make him the nervous groom? Is he satisfied that everything is in place and it all doesn’t go horribly wrong before the honeymoon period is over? “The IPO is called the wedding night and the listing is the life after, so we have to take care of the listing even more. We are trying to build up the equity story and what Tasweek is all about and where we are going from here,” he says, laying out his proposal. As much as he likes his analogies and catchy metaphors, Al Awar also likes his data and he has certainly done his number crunching ahead of the big day later this year. “We analysed that 60 percent of the IPO requirement — why people want to invest in a company — they base their decision on the financials. So things like the earnings per share, growth, sales and debt-to-equity ratio and how the company has managed itself. “The other 40 percent is on the management quality, the systems in place and the corporate governance. If these two components are strong we can think about going public.” Many certainly agree with him. Husam Hourani, managing partner at Al Tamimi & Company, one of the region’s top IPO lawyers, recently said the public listings in the Gulf countries are finally set to boom again, with at least 20 IPOs in the pipeline. Hourani told Reuters the IPO boom in the Gulf was helped by lighter regulation and legal reforms as governments seek to diversify their oil-dependent economies. The total value of IPOs in the six Gulf Cooperation Council (GCC) countries peaked at a record $12bn in 2007 and then plunged as markets froze up. Last year, GCC IPOs totalled roughly $2bn. IPO activity has recovered more slowly in the GCC than it has in much of the world. Some Gulf firms have preferred to go to foreign markets such as London, seeking greater liquidity and less restrictive rules. Al Awar is still targeting December this year for the listing and says the motivation is clear and the “objective is that we want to create wealth for our five major sectors: Number one is the shareholder, two is the stakeholders, then our customers, the industry and the employees who have made the company what it is today.”While the likes of Damac have listed in London, Al Awar is staying close to home and is currently in discussions with various players. “We will do our listing locally in the UAE. So far we are playing with those available: the DFM [Dubai Financial Market], ADX [Abu Dhabi Securities Exchange] and Nasdaq. We have met with them and are going through all their processes and procedures.” The figure that has been mentioned consistently is AED1bn, one Al Awar is still confident about. “We have a capital of AED300m and the norm in the real estate industry is 30:70, so we know that this is a AED1bn company. We have international investors who have come from Malaysia, the GCC and also from Europe. Our portfolio is from Morocco to the UAE to Malaysia and we are proposing to go to Indonesia. With the projects increasing we know it was the right time to go for the IPO.” Of course, this isn’t the first time that Al Awar has been in a unique position building up to a landmark occasion. He holds the title of being the first real estate agent to sell freehold property in Dubai and he was also instrumental in arranging the first visa for an overseas property owner. “It was the Dubai Marina project — that was the first ever ownership of a planned freehold. When I started it was a 99-year lease and it turned into a freehold within six months,” he recalls. He made the ground-breaking sale while he was at Emaar Properties, the developer of the Burj Khalifa — the world’s tallest building — where he worked for seven years. After earning his stripes at the Dubai master developer, Al Awar worked for Abu Dhabi’s Sorouh Real Estate for two years before deciding it was time to go it alone. He then helped set up Tasweek Real Estate Development and Marketing at the beginning of 2009.
