Saudi’s Tanmiyat eyes REIT, IPO for expansion

Saudi’s Tanmiyat eyes REIT, IPO for expansion
(Reuters)

10 April 2007



SINGAPORE - Saudi developer Tanmiyat Investment Group plans to divest $1 billion worth of its assets through a property trust listing in the United States and set up a Singapore-based finance firm to fund its expansion abroad.


Tanmiyat Investment Group Deputy Chief Executive Officer Abdullah Aziz Al Majed told Reuters in an interview the firm was also mulling an initial public offering (IPO) in either Singapore or London in 2009 to raise about $1.2 billion, or equivalent to 30 percent of its total $4 billion in assets.

“The family hasn’t decided yet. We will go for an IPO when we’ve expanded our business to other countries. We want to be an international company when we list,” said Abdullah, one of the four brothers that run the family firm founded in 1982.

Tanmiyat’s real estate investment trust (REIT) is more imminent, with a listing in the US expected in the next three to four months, Abdullah said. The REIT’s portfolio will include some of Tanmiyat’s residential, office and hotel assets in Saudi Arabia, Turkey and Dubai.

Funds raised by the REIT listing are likely to come in handy as Tanmiyat is set to spend about $15 billion in property development over the next few years in its key markets of Saudi Arabia, Dubai and Turkey.

Among the massive projects undertaken by the firm is its sprawling 24 million square feet Legends development in Dubai, which will cost $3.8 billion and combine residences, offices and hotels with theme parks that feature robotic dinosaurs and artificial waterfalls.

These projects have been funded internally, but the firm is also setting up a finance company in Singapore with an initial capital of $1 billion, Abdullah said.

“We’ve always been in real estate, but now we’re moving into finance. This company will help finance our projects but also others in Asia and Europe.”

Abdullah said Tanmiyat was close to making its first acquisitions in Asia as it is in final negotiations to invest up to $120 million in a joint venture to build an office complex in Shanghai.

The firm is also hoping to buy a plot of land in Singapore to develop a hotel.

“We are also studying Macau and Vietnam, but our target for now is Singapore and China. We cannot be everywhere,” Abdullah said