A Bloomberg report cited two people who had knowledge with the matter who said Damac Real Estate Development Ltd was resolved to cutting its initial public offering size and price its shares for the IPO at the bottom end of its pricing range. The Dubai-based property developer was initially expecting to raise USD500 million in its IPO.

The people, who refused to be identified as the matter have yet to be made public, said Damac is now expecting to raise USD400 million from the public listing and will price is global depositary receipts priced at USD12.25 per share. The people also added that the IPO closing will be deferred until the second of December.

Damac's IPo will see Al Firdous Holding and Sahira Co selling up to 18.8% in the real estate company. Al Firdous is controlled by founder of Damac Properties Development Co Hussain Sajwani.

In a phone interview yesterday, A/T Capital Management portfolio manager Ali Taqi said, "It was expensive to us even at the lower end of the range. We couldn't justify the valuation." Dubai-based A/T Capital manages USD170 million in assets.

The offering would be the first one for a Dubai-based developer after the real estate market in the sheikdom crashed in 2008. Damac's IPO is set to test global investor appetite for the property market of the city, which is seen recovering. Analysts had valued Damac at around USD3.9 billion to USD5.4 billiom, said three people on November 4. On November 14, Damac said its valuation ranges was between USD12.25 and USD17.25 per global depository receipts. This will put the real estate company's value at the USD2.7 billion to USD3.7 billion range.

Banks who will be managing the IPO are Citigroup Inc. and Deutsche Bank AG, and also with the participation of Samba Capital and Investment Management Co. and VTB Capital Plc.