Dubai-based property developer Damac’s listing shows international investors are still cautious about the UAE property market.

The company managed to raise $348m by selling shares in the form of Global Depository Receipts (GDRs), but had to settle for a share price at the bottom of the range ($12.25). That indicated investor response fell short of expectations. Through an over-allotment option it was finally able to take the total proceeds to $400m, still $100m lower than the amount it originally sought to raise. In addition, the shares attracted little activity following the listing.

While the tepid reaction to the offering shows that investors have not forgotten the 2008 real estate crash, it also indicates it is possible to move on. The clever timing of the share sale – Damac offered its GDRs to investors the same week Dubai’s World Expo 2020 win was announced – helped lay the focus on the future instead of the past.

The successful Expo 2020 bid does not mean the developer is guaranteed an easy ride ahead, however. Analysts are warning Dubai’s property market is showing signs of overheating and investors still feel more laws are needed to prevent another economic bubble from forming.

With property value increases related to Dubai’s Expo 2020 already baked in the 30 per cent year-on-year rise of the real estate market, it is unlikely they will rise much further until the end of 2013. But beyond that, Damac could profit from the $43bn in infrastructure Deutsche Bank estimates will be required to host the event.