BLOOM EYES IPO AMID PLANS FOR DH5BN MEGA PROJECT
Expansion in education, health care and overseas diversification also on the cards for developer
Abu Dhabi private real estate developer Bloom Holding is eyeing an initial public offering in the next two years, in part to finance its biggest project to date – a Dh5 billion mixed-use community near Abu Dhabi International Airport.
“We have a giant plot of land that we are in the master-planning phase for, and recently received the green light from the municipality to proceed. Hopefully we’ll be able to launch it early next year,” Sameh Muhtadi, chief executive of Bloom Holding, told The National at Cityscape in Abu Dhabi.
“This is a very long-term project for us, but it’s going to be our biggest undertaking to date.”
The scheme, spanning 2.22 million square metres of land, is to be called Bloom District, and would likely be built over six phases incorporating schools, healthcare facilities, shops, offices and housing.
Bloom is in the final stages of determining the exact size of the scheme and how much gross floor area would be built.
A potential IPO of the company, which is part of Abu Dhabi’s National Holding, was mooted in January 2017 as one of several ways of financing future projects. Mr Muhtadi said he was now targeting an IPO in the UAE or the London Stock Exchange.
A dual listing was a possibility, and the company was also considering a bond issue.
“This will be a significant project and it’s going to require significant investments ... especially in the early stages, where you need to develop infrastructure and roads without any revenue from them,” Mr Muhtadi said.
The listing is slated for the end of 2019, or 2020, subject to approvals. “I believe, internally, we should be ready for an IPO towards the end of 2018, but listing is not only dependent on our readiness, it’s dependent on market conditions, sentiment and appetite of investors to invest in the real estate market.” The company recorded 15 per cent year-on-year growth in revenue in the past financial year.
Like the rest of the UAE, Abu Dhabi’s real estate market slowed in the wake of a threeyear oil price slump.
Residential sales and rental prices in particular declined steadily and are not expected to pick up until 2019, experts say. The market is “slower than we’d like”, but lower price points and growth of middle income housing were appealing to investors, Mr Muhtadi said.
Bloom plans to grow over the next five years in every sector it is in, and increase the company’s recurring revenue stream.
Education, health care and overseas diversification are the priorities, with plans to open 15 children’s nurseries in the UAE in the next three years – two are already open, two are under construction and Bloom is in advanced negotiations to acquire eight others, Mr Muhtadi said.
The developer is also opening two schools in Dubai this September with a total capacity of 4,000 pupils. In Al Ain, the company is planning its first standalone retail property. In Saudi Arabia, Bloom is in advanced talks with the kingdom’s Royal Commission to build new housing for senior oil and gas employees working in Jubail and aims to complete a deal by June, Mr Muhtadi said.
In addition, Bloom is expanding in the US with plans for a $220m health care-led mixed-use project in Minnesota. It comprises a rehabilitation centre operated by US healthcare chain Mayo Clinic, as well as a 220-home senior living complex, a hotel and apartments.
This will be a significant project and it’s going to require significant investments ... especially in the early stages SAMEH MUHTADI Chief executive, Bloom Holding