RAK government to raise stake in property developer to 34%

Rahul Naduvat/Unsplash

• Current government holding just 5%
• Boost follows capital increase
• Developer gets access to discounted land

The Ras Al Khaimah government is planning to raise its stake in the emirate’s flagship real estate developer to more than a third.

Shareholders in RAK Properties have approved a capital increase with the issuance of 920 million new shares, each with a nominal value of one dirham, effectively increasing the company’s capital by AED920 million ($251 million). 

Pending approval from the Securities and Commodities Authority, the RAK government will raise its stake in RAK Properties from 5 percent to about 34 percent after the new shares are issued.  

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Under an agreement with the government, the developer will gain access to land at reduced prices. At the time of writing, the company share price was unchanged during trading on Tuesday.

RAK Properties’ CEO, Sameh Muhtadi, described the government’s move as a “strong testament to the confidence placed in our vision and long-term growth plan”.

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He said that the deal for discounted land will help RAK Properties to diversify its landbank, something he said was essential for fuelling future developments. 

“This ensures a sustainable pipeline of projects that will contribute to meeting the growing needs of the community and the market in Ras Al Khaimah,” Muhtadi said.

RAK Properties said last month that sales reached almost AED3 billion last year, primarily driven by new project launches.

Net profit exceeded AED200 million, a more than sixfold increase compared to AED31 million in 2022.

Revenue surged past AED1 billion, more than double the AED408 million of 2022, while total assets grew to AED6.5 billion. 

In October S&P Global Ratings rated RAK’s long-term outlook as “positive”, upgrading it from “stable”.

Real GDP growth in RAK, the fourth largest emirate in the UAE, with a population of nearly 350,000 people, is likely to average close to 4 percent over the next four years, up from 2.6 percent in 2012-2021, S&P Global said.