Arabian Construction Co. (ACC), based in Abu Dhabi, is contemplating an initial public offering (IPO) in the United Arab Emirates to take advantage of the country’s flourishing property market. The firm has reached out to banks to propose their roles in this potential share sale, which could generate several hundred million dollars, although no final decisions on the size or timing of the transaction have been made.

The surge in demand for real estate in the UAE is driven by low taxes and liberal visa policies that have attracted affluent professionals from around the globe. This influx has transformed Abu Dhabi and neighboring Dubai into significant centers for both commercial and residential real estate, with Emirati developers reporting record profits. Shares in companies such as Aldar Properties PJSC and Emaar Properties PJSC have increased by approximately 70% over the past year.

The rising strength of the property market has sparked a wave of IPO activity. Alongside ACC, another construction firm backed by Investment Corp. of Dubai is seeking to raise up to $500 million, while a vehicle controlled by the ruler of Dubai plans to list two separate real estate portfolios. However, construction companies must navigate the challenges of the UAE’s boom-and-bust property cycles; for example, residential prices fell for six consecutive years before rebounding close to two-thirds in the post-pandemic period.

Arabtec Holding PJSC, known for building the world’s tallest skyscraper, went into liquidation in 2020, and Drake & Scull International PJSC had to write off $1.1 billion in debt last year. Founded in 1967, ACC has delivered several landmark projects in the UAE, including the Sheikh Zayed Grand Mosque and the Emirates Palace Hotel. Its ongoing project pipeline features the ultra-luxury Six Senses Residences located in Dubai’s Marina area.