Dubai’s Parkin IPO to open on March 5 offering 24.99% in first UAE listing in 2024
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Retail investors will have the opportunity to take up 10 per cent of the share float and will be guaranteed to receive a minimum of 2,000 shares each.
The minimum application amount for the retail tranche is Dh5,000 and thereafter in increments of Dh1,000 each.
Parkin accounts for more than 90 per cent of Dubai’s on- and off-street paid parking spaces, and has the “exclusive right” to operate all on-street and off-street public parking spaces. Last year, it made revenue of Dh779.4 million.
In absolute numbers, Parkin operates 175,000 parking spaces at 85 locations across the city, another approximately 4,000 spaces at nine MSCPs (multi-storey car parks) and around 18,000 spaces at seven developer-owned facilities.
Parkin closed 2023 with Dh779.4 million in revenue, representing steady revenue growth from Dh590.6 million in 2021 and Dh686.2 million in 2022.
Net profit for 2023 was Dh414.4 million, up from Dh336.5 million.
As the city expands, Parkin can too
In its decades-long urban planning, Dubai is creating new residential and commercial hubs. And wherever the city expands, Parkin will be able to do so too, which will play well into its medium-term revenue projections.
Concession agreement with RTA
Parkin’s “main asset” is the concession agreement with RTA, under which it will have exclusive rights to operate “all current and future paid parking facilities” in Dubai. The agreement is “long-term” and comes with a tariff “increase” mechanism to compensate for inflation.
Here’s how Parkin will target further revenue creation in the future:
- By converting part of the unpaid parking spaces. Currently there are around 392,000 spaces of this type.
- Negotiations with real estate developers.
- Adjust zoning in the city’s most in-demand parking areas.
- Incorporate more digital initiatives to increase efficiency.
- Offer new commercial activities such as payment channels and rental of spaces to food trucks and companies that build mechanical parking lots. Also, provide car washing and dyeing services.
- Allow advertising spaces.
- Develop geographically when possible.
Another great year for UAE stocks?
Parkin thus sets an early marker for the UAE stock markets, after two exceptionally busy IPOs through 2022 and 2023. Last year closed with consecutive excellent responses, for Dubai Taxi and PureHealth in Abu Dhabi.
According to banking sources, retail investors had been preparing for Parkin’s IPO since the company’s incorporation was announced in early January. The objective: to reach Dubai’s transport-related service providers, be it Salik, DTC and now Parkin.
In this race, shareholders have been richly rewarded. Salik’s stick has risen 80 percent since its IPO in September 2022, and Dubai Taxi has gained 20 percent since its debut last December 6.
“Parkin’s strong earnings figures further reinforce investors’ expectations of long-term capital gains from the RTA spin-offs,” said Sameer Lakhani, managing director at Global Capital Partners. “Investor interest is expected to be strong. While IPO pricing has not been announced, comparable Nasdaq-listed companies such as SP Plus Corp are trading at 30x, implying significant growth potential for Parkin given that valuations are typically priced at a discount to peers.”
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