Dubai-based developer Damac Properties’ listing on the London Stock Exchange 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, Damac 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 2008-09 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 have been warning Dubai’s property market is showing signs of overheating and some investors still feel more laws are still needed to prevent another economic bubble from forming.

With property values in the emirate already having risen 30 per cent year-on-year, it is unlikely they will rise much further in the immediate future. But beyond that, Damac looks set to benefit from sustained growth in Dubai’s economy and general rising demand for property.

Interview with Hussain Sajwani, founder, chairman and chief executive, Damac Properties