Dubai Parks and Resorts, a subsidiary of developer Meraas Holding, has launched its initial public offering (IPO) on the Dubai Financial Market (DFM).

The offering comprises approximately 2.5 billion ordinary shares, which represents 40 per cent of the company’s post-offer issue share capital.

Shares are priced at AED1 per share, plus AED0.01 per share in offer costs, bringing the total offer size to AED2.5bn ($681m).

The proceeds of the IPO are to be used to form the equity part of a funding package supporting the development of theme parks in Dubai.

The project involves the construction of three theme parks, a new four star hotel called Hotel Lapita, and a retail, dining and entertainment district which will connect the theme parks and hotel.

The project is being built close to Palm Jebel Ali between Dubai and Abu Dhabi and is due to be completed before the end of the year.

Dubai Parks and Resorts is a new company with no track record in constructing theme parks, but analysts see investor confidence in the company bolstered by the strength of the parent company Meraas.

The fast-growing tourism sector in Dubai is also expected to drive investor appetite for the offering.

The subscription period is due to close on 30 November.