Saudi Arabia's Dar Al Majed's IPO sees swift demand, valued at SR4.2 billion

Saudi Arabia’s Dar Al Majed Real Estate Co. saw demand for all shares on offer in its 1.26 billion riyals ($336 million) initial public offering within minutes of books opening on the deal in Riyadh, according to people familiar with the matter.

The real estate developer’s shareholders will sell a 30% stake, or about 90 million shares, at between 13.5 and 14 riyals apiece, the people said, declining to be identified discussing private information. The top end of the range values the firm — better known as Almajdiah — at 4.2 billion riyals.

Institutional bookbuilding will be open until Aug. 4, while the retail subscription period will run from Aug. 14 to 18.

Saudi Arabia has been the most active venue for new share sales in the Middle East so far this year, with companies raising more than $3 billion. Still, recent listings have seen mixed performance as valuations in the kingdom come into focus amid a lower-for-longer oil price environment.

Developers like Almajdiah stand to benefit as Saudi Arabia loosens rules around foreign property investment and works to boost local home ownership rates under its broad economic diversification drive.

Al Ramz is another real estate firm that has regulatory approval to list. Building materials supplier Marketing Home Group is also set to go public in the next few weeks. 

Established in 1999, Almajdiah develops residential communities primarily in Riyadh. BSF Capital, the investment banking arm of Banque Saudi Fransi, is arranging the transaction.