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Edison issues initiation on Dar Global (DAR): More luxury brand retailer than housebuilder

Edison Investment Research Limited
Edison issues initiation on Dar Global (DAR): More luxury brand retailer than housebuilder

02-Nov-2023 / 15:39 GMT/BST
The issuer is solely responsible for the content of this announcement.


 

London, UK, 2 November 2023

 

Edison issues initiation on Dar Global (DAR): More luxury brand retailer than housebuilder

Dar Global is a developer of premium-priced luxury branded residences, led by a management team with a track record of successful long-term delivery. It employs a ‘capital-light’ business model that reduces risk and allows for rapid scalability. It is in the early stages of delivering over 5,700 residences in the Middle East and Europe, with an ambition to expand the portfolio in number and geography. It also intends to develop a hospitality portfolio. We anticipate that Dar Global will generate a return on equity in the high teens and we value the company on a multiple of shareholders’ funds basis at c US$930m (US$5.17/share), implying c 40% upside.

Dar Global remains in the early stages of its development, although management has a long and successful track record in the space. It targets a 15% return on investment in Gulf Cooperation Council (GCC) countries and 12% elsewhere, but we believe it should generate a return on equity in the high teens by FY24 and FY25, which justifies valuing the company on a multiple of 1.5x estimated shareholders’ funds. Taking our forecast FY25 shareholders’ equity values the group at c US$930m versus a current market capitalisation of US$662m, therefore implying c 40% upside. Further upside could be justified.

  
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About Edison: Edison is a leading research and investor relations consultancy, connecting listed companies to the widest pool of global investors. By focusing on the volume and quality of investors reached – across institutions, family offices, wealth managers and retail investors – Edison can create and gauge intent to purchase, even in the darkest pools of capital, and then make introductions via non-deal roadshows, events or virtual meetings.

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For more information, please contact Edison:

Andy Murphy +44 (0)20 3077 5700 industrials@edisongroup.com

Natalya Davies +44 (0)20 3077 5700 industrials@edisongroup.com

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The issuer is solely responsible for the content of this announcement.


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1764059  02-Nov-2023 

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