Dubai Investments sees future gains

Industrial parks in Saudi Arabia and Angola expected to generate revenues soon

Dubai Investments expects to generate revenues from its two major overseas commitments in Saudi Arabia and Angola well before 2018, according to a top official. Its plans for a push into Africa with industrial parks and their management will get a major boost by the sealing of a deal in Angola this month.

The holding company held its annual general meeting yesterday evening, in which shareholders voted for a 12 per cent cash dividend (totalling Dh486 million) and 5 per cent bonus shares. Also, elections were held for the board of directors, which led to wins for the incumbent members and the voting in of two additional directors.

“There are two ways we could start raising revenues — either sell plots to investors or build up the infrastructure first and then sell,” said Khalid Bin Kalban, Managing Director and CEO. “The second way we could get a higher price on the land.

“For the Angola venture, we will hold 90 per cent of the equity in the operating company and local investors the rest.

“I think expecting fund generation this year itself might be optimistic, but next year should see us making a strong start.”

In Saudi Arabia, Riyadh is where the Dubai Investments is going to create its next sprawling asset encompassing light industrial units and warehousing facilities. The land will be held by a fund and Dubai Investments will buy into it. The Dubai entity has a joint venture with a Saudi partner for the venture.

An overseas push becomes vital for Dubai Investments with its flagship development in Dubai — DIP — having a 95 per cent utilisation rate.

Its proximity to the Expo 2020 site and general stability in demand for industrial real estate has placed DIP a magnet for institutional investors. Some big-ticket deals have been closed in the recent past, including one by Arcapita, the alternative investment firm.

“The same formula that makes DIP attractive for institutional funds can be replicated elsewhere,” said Kalban. “Both Saudi Arabia and Angola offer such prospects in the longer term.

“At DIP itself, we do not have much spare land to build on … we will certainly see what we can do to get more in our home market.”

Last year, the recorded net profits of Dh1.22 billion, an increase of 10 per cent compared over 2015. Total assets increased by Dh861 million to Dh16.1 billion as of end December.

Any expansion of its development portfolio will sit well on its top- and bottom-line numbers. Property currently accounts for around 62 per cent of total assets and contributes 50 per cent of the revenue while manufacturing and contracting represent 19 per cent of assets and 48.5 per cent of revenues. Financial investments added 19 per cent to it.

The 2016 annual report states: “During 2017, the company will continue its execution of real estate projects and exploring new investment opportunities — primarily in the education and health care sectors. Dubai Investments will also be looking at opportunities for exits from existing businesses and assets.”