RAK Properties considering hospitality IPO

RAK Properties

• Hospitality is ‘cornerstone’
• Listing under consideration
• $882 million market cap

RAK Properties, Ras Al Khaimah’s largest publicly listed property developer, is assessing a separate stock market float for its rapidly growing hospitality business, its CEO Sameh Muhtadi told AGBI.

The company, which trades on the Abu Dhabi Securities Exchange, is expanding its hotel portfolio and says it has letters of intent from two major hotel operators.

Muhtadi said that while the company’s immediate focus remains on developing and stabilising its hotel assets, a future listing for the hospitality branch is under active consideration. 

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“Our focus is going to be on listing the hospitality vertical, but that’s a little bit down the road. There can be a consideration of either private placement or potentially taking that vertical public.”

He said that adding more hotels was “one of the cornerstones” of its strategy.

RAK Properties’ hospitality assets include the InterContinental Ras Al Khaimah Mina Al Arab Resort & Spa and the Anantara Mina Al Arab Ras Al Khaimah Resort. It is nearing the final design phase and set to appoint contractors for its Nikki Beach and Staybridge Suites Mina Al Arab hotels, Muhtadi added.

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In July the Ras Al Khaimah government, one of two major shareholders in the company, increased its stake in RAK Properties to 34 percent. 

The increased investment indicated the government’s confidence and perceived value of master plan-led developments and their critical role in the emirate, the company said in a statement.

As of the end of July, RAK Properties’ market capitalisation was approximately AED 3.2 billion ($882 million).

RAK Properties

The Ras Al Khaimah Tourism Development Authority reported a record 1.2 million overnight visitors in 2023. This was its best year for tourism so far, with a 24 percent year-on-year increase in international tourists.

This surge has also pushed hotel occupancy rates up to 74 percent occupancy, marking an annual increase of 12 percentage points.

The local real estate and hospitality sector is poised for a further boost with the expected 2027 opening of the Gulf region’s first gaming resort by US-based Wynn Resorts on Al Marjan Island. 

Earlier this year a CBRE report suggested that the potential legalisation of gaming could contribute $8.5 billion annually to the Gulf state’s economy. 

Gambling has been strictly prohibited in the UAE, but last week the country issued its first lottery licence and a new regulatory framework, signalling a highly anticipated shift in policy since the Wynn was announced.

This change aligns with Ras Al Khaimah’s ambitions to expand its GDP by 80 percent by 2030 and grow its population from approximately 400,000 to more than 600,000.