Omniyat will raise $500 million to finance expansion
By Parag Deulgaonkar on Friday, February 15 , 2008
(SUPPLIED)
Omniyat Holdings, the parent company of Omniyat Properties, is in talks with two international banks to raise $500 million (Dh1.835 billion) to finance its Dubai projects and overseas expansion strategy, a top company executive said.
“We are in talks with two international banks to raise about $500m this year through a syndicated loan and bond issue,” Tony Manning, Chief Financial Officer, Omniyat Holdings, told Emirates Business.
Last year, the company said it would raise up to $200m through a sukuk, or Islamic bond. In the second half of 2007, a number of regional firms either cancelled or postponed their debt issues due to the international credit crunch and widening credit spreads.
Gulf Co-operation Council (GCC) firms raised more than $46bn in 2007 through bond issues – $28.39bn through conventional bonds and $17.9bn through sukuk.
“Since market conditions were not right then, we decided not to enter the credit market. Now, we are looking at all the options as borrowing costs have come down,” Manning said.
Omniyat will venture into the master-development field. “We are in an advanced stage of talks with our partners in Dubai to launch a master development. We are looking to launch master developments in Saudi Arabia and Bahrain,” he said.
This year Omniyat Holdings will also launch an Islamic mortgage finance company to tap the growing home finance business in the country.
“We will concentrate on consumer finance and enter the Shariah-compliant mortgage financing business through a joint venture,” said Mehdi Amjad, President and CEO of Omniyat Holdings.
According to market analysts, the Dh32bn UAE mortgage industry is likely to grow by about 50 per cent this year, led by demand in Dubai and Abu Dhabi.
In the second quarter, the holding company will also launch an investment management company, Omniyat Investment Management, with offices at the Dubai International Financial Centre.
“The company will be regulated by Dubai Financial Services Authority and will be our fund management vehicle giving the institutional angle to our business and access to the global private capital market,” Amjad said.
The company will also enter the asset and facility management business in the second half of the year, said the chief executive.
Omniyat Properties will quadruple the value of its property portfolio in Dubai to Dh21bn by investing Dh15bn this year.
“We will launch seven new projects this year as we have acquired a land bank of six million square feet in the past six months for more than Dh2.2bn,” Amjad said.
Omniyat Properties achieved sales of more than Dh3bn in 2007 compared to Dh1.5bn in 2006, with Amjad being bullish on the growth prospects this year.
“Today, our properties command a premium in both the primary and secondary markets. Those investors who have been buying our properties, whether directly or from other investors, have benefited tremendously,” he said.
In 2007, Omniyat Properties launched The Pad and The Opus in Business Bay, while the holding company launched Investate, a real estate investment company in Bahrain.
“Our One Business Bay and Bayswater projects are now on track for completion and we will be delivering them this year,” according
to Amjad.
The company is now entering the UAE capital, Bahrain and Saudi Arabia’s real estate markets.
“We will go beyond Dubai in 2008. We will be launching projects in Abu Dhabi, Bahrain and Saudi Arabia through our strategic relationships with our partners to become a regional player,” Amjad said.
