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Dubai plans to sell 25% stake in public parking business via IPO

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Dubai plans to sell 25% stake in public parking business via IPO

Dubai plans to sell 25% stake in public parking business via IPO

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The Dubai government intends to divest a 24.99% ownership interest in Parkin, the entity responsible for managing public parking operations within the emirate, via an initial public offering, marking the emirate’s inaugural privatization endeavor for the year, as per Parkin’s statement on Tuesday.

According to the statement, Parkin currently oversees approximately 179,000 paid public parking spots throughout the Dubai emirate, with around 4,000 situated in multi-storey car parks (MSCPs). Additionally, it manages an extra 18,000 spaces located within facilities owned by developers.

According to the government of Dubai’s media office, Parkin has a 100% share of Dubai’s on and off-street paid public parking market and 91% share of Dubai’s on- and off-street paid parking market.

Parkin, which expects to make its bourse debut next month, booked revenue of 779 million dirham ($212.1 million) in 2023, up 14% from a year earlier, while its core profit rose 23% to 414 million dirham.

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Following the remarkable success of the government-owned Dubai Taxi Company’s (DTC) initial public offering (IPO), which garnered over 150 billion dirhams ($41 billion) in investor orders for its $315 million offering, a groundbreaking achievement for the city, Parkin’s IPO emerges. With an oversubscription of 130 times, the Dubai Taxi Company witnessed the highest demand ever recorded for a Dubai IPO, as stated.

Ahmed Hashem Bahrozyan, Chairman of Parkin’s Board of Directors, expressed optimism about the forthcoming IPO, stating that it “will enable us to build on and accelerate our progress in supporting these ambitions, driving the Emirate’s future success,” as conveyed by a statement from the Dubai government’s media office.

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“As Dubai’s population and economy continue to grow, our company will grow with it. As a result, I am confident in Parkin’s future opportunities, delivering on our vision to become one of the leading parking providers in the world,” he added.

The statement also quoted Parkin CEO Mohamed Al Ali as saying: “With its systemic role in Dubai’s transport ecosystem, now and in the future, Parkin will operate at the centre of the city’s exciting and ambitious growth plans.”

The media office revealed that the number of registered vehicles in Dubai is expected to increase by 4% per annum on average to 2033, while demand for public parking is expected to increase by 4.8% per annum on average over the next ten years, driving 60% growth by 2033.

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Further IPO details

DIF intends to sell 749.7 million shares, with the offering scheduled to commence on March 5. The pricing range will be disclosed on the same day, and the subscription period for retail investors concludes on March 12.

Rothschild has been appointed as the independent financial adviser, while Emirates NBD, Goldman Sachs, and HSBC are serving as joint global coordinators and joint bookrunners.

Following the offering, Parkin plans to distribute a semi-annual dividend in April and October, with Abu Qaoud stating that the minimum dividend payout for 2024 will either surpass the net profit for the year or exceed free cash flow to equity.

In 2023, companies based in the Gulf Cooperation Council (GCC) raised $11 billion in IPO proceeds, marking a 45% decline from 2022. GCC IPOs represented 40% of the proceeds raised in the EMEA region during 2023, a decrease from 56% in 2022, as per data from the LSEG.

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