Dubai-based Emaar Properties has confirmed that its Emaar Malls Group has raised a $1.5bn Islamic loan through a consortium of UAE-based banks.

The facility has been raised ahead of the planned initial public offering (IPO) of the property company’s shopping malls business on Dubai’s main stock exchange.

In a note to the Dubai Financial Market (DFM), Emaar Properties said the loan was raised to “optimise its capital structure” before the IPO.

The loan is repayable over seven years and is priced at 1.75 per cent a year over the London Interbank Offered Rate (Libor).

Emaar is planning to list 25 per cent of its shopping malls subsidiary and will use the funds to distribute as a dividend to shareholders of Emaar Properties.

Profiting from rising visitor numbers to Dubai, Emaar Malls Group is one of the fastest-growing divisions of the company.

The entity includes major shopping destinations such as Dubai Mall, Dubai Marina Mall, Souk al-Bahar and Gold & Diamond Park. In 2013, the unit recorded revenue of AED2.84bn ($773.2m), a yearly increase of more than 20 per cent. That represents just over a quarter of the company’s total revenues of AED10.33bn.