A new company, set up by two Asian property investors, that is seeking to trade in the Dubai property market has announced plans for its initial public offering (IPO) prior to listing on OFEX. It aims to give small investors the opportunity to benefit from the real estate boom in the Middle East. International companies and property developers as well as the rich and famous have been investing in the booming Dubai economy and property marketn for years. The launch of Dubai Realty Opportunities Plc’s (DRO) will bring the ability to participate in the Dubai property boom within reach of smaller investors.

The family trusts of DRO’s chairman, property investor Pervaiz Naviede, will invest up to £1million of the £5 million being raised in this initial offering. In future rounds DRO hopes to raise a total of £50,000,000 from investors which when combined with bank facilities are expected to give DRO an investment capability of up to £100,000,000.

With successful property investments in the UK, Germany and Dubai, Pervaiz Naviede is an experienced developer, investor and trader with over 20 years of experience. He is the Chief Executive of Legendary Property Company Limited (LPC), based in Salford Quays, Manchester, which he co-founded in May 1984. Pervaiz also owns LPC Living Limited, an urban regeneration specialist which refurbishes tower blocks, having already done so in Manchester and Liverpool, into city-style apartments. LPC Living is currently involved in residential development projects worth £100 million and overall, LPC Living has £275 million worth of residential development projects in the pipeline.

DRO Chief Executive, Nozmul Islam has been involved in the property market in Dubai for the last few years, accruing a portfolio of properties for The Pervaiz Naviede Family Trust including real estate on the Palm, Jumeriah Beach Residences, and the Burj (destined to be the tallest building in the World).

Nozmul Islam, DRO CEO, says; “Our strategy is relatively simple. We aim to buy property in bulk off plan, which will then be resold during and on completion of construction. DRO will gain from the difference between the bulk and individual prices as well as any increase in the property value between purchase and on sale. A small number of the properties (around 15%) will be retained and form the basis of a rental property portfolio. We intend to follow a prudent strategy and only become involved in transactions where we have the funds available to see them through to completion, rather than operate on a more speculative basis.”

The directors believe that their investment vehicle is well timed to take advantage of the eagerly anticipated decree by the Dubai authorities, which will formalise the freehold status of properties. Along with many other Middle Eastern property specialists, DRO’s directors believe that the consolidation of freehold status in Dubai will encourage international banks to increase their presence in the market further enhancing demand for real estate in the region.

The initial offering is attractively structured using a combination of ordinary shares and loan stock. All investment will be split into one third ordinary share capital and two thirds loan stock. For the minimum investment of £2,400, an investor will receive 1,000 ordinary shares at 80p and £1,600 of 10% loan stock.

It is the Director’s intention to provide a dividend yield of 10% on the initial subscription price. This means investors will have the prospect of a 10% income stream as well as a capital gain on their investment. As the company will be trading in property it is expected that DRO will qualify for Business Asset Taper Relief. This means that UK higher rate tax payers will only pay tax at 10% on any capital gain, provided they keep their investment for at least two years.

DRO’s management team who have considerable experience in property development as well as knowledge of the Dubai marketplace have partnered with long-established organisations in the region including CB Richard Ellis and the UAE’s largest property management company, Asteco, which has Sultan Bin Sulayem as chairman. Jerry Oates of Asteco has joined the board of DRO as non-executive director.

Dubai:

• Population of Dubai is set to increase by 8% p.a. to 2.2 million by 2010.
• Number of tourists per year set to grow from 4.7m in 2002 to 15m by 2010.
• Value of land transactions rose from us$0.8 billion in 2001 to US$ 3.2 billion in 2004.
• Burj Dubai expected to be the world’s tallest building when completed in 2008.
• Construction of Dubailand, the world’s largest and most ambitious tourism project ever created, is underway.

Further information can be found at www.dubaishareoffer.com .

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