Dubai
Arada Developments LLC, a Sharjah-based developer of mixed-use communities, said it has successfully completed the issuance of its second public financing deal, a US$400 million (Dh1.46 billion) sukuk that was oversubscribed 3.5 times to US$1.45 billion, which has been listed on the London Stock Exchange and the Nasdaq Dubai.
Rated B1 by Moody’s and B+ by Fitch credit rating agencies, this is the first issuance under Arada’s newly established $1 billion Sukuk programme. The five-year fixed rate RegS Sukuk issuance, rated BB- by Fitch and B1 by Moody’s, was priced at par with a coupon of 8.00 percent, inside the initial guidance area of 8.675 percent for a spread of 355 bps over US Treasuries.
“The trade achieved one of the highest price tightening by a real estate issuer from the GCC, and also priced with a spread which is more than 150bps inside the previously priced debut sukuk,” the company said in a statement. The proceeds of the sukuk will be used for the management of existing bilateral funding, general corporate purposes and to support development at Arada’s existing projects. The sukuk issuance saw strong demand from both regional and international investors, with a subscription order book of $1.45 billion, 3.5 times the offer size.”
Investor interest for the sukuk was diversified geographically, coming from Europe, the Middle East and Asia. The investors for this issuance include institutional investors, fund managers, High Net Worth Individuals (HNWIs), and banks.
Prince Khaled bin Alwaleed bin Talal, Vice-Chairman of Arada, said: “We are pleased to have enjoyed a successful return to the market with the closure of our second sukuk. This landmark issuance is once again testament to the strong level of interest from institutional investors around the world in Arada’s stable track record, good governance and compelling growth story.”
Abu Dhabi Commercial Bank, Dubai Islamic Bank, Emirates NBD Capital and Standard Chartered Bank acted as the Joint Global Coordinators for the sukuk, while Arab Bank, Kamco Invest, Mashreq, RAK Bank, Sharjah Islamic Bank and Warba Bank acted as Joint Lead Managers and Bookrunners.
Since its launch in 2017, Arada has launched six successful projects in both Sharjah and Dubai, with a combined sales value of AED60 billion. These include Sharjah’s largest ever mixed-use megaproject, Aljada; the UAE’s first forested community, Masaar; and the ultra-luxury Armani Beach Residences at Palm Jumeirah.
In 2023, the master developer announced a 100 percent increase in the total value of property sold to Dh7.02 billion, compared to the previous year. In total, Arada has sold 14,000 units since inception, valued at over Dh17 billion, with over 9,000 units completed.
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Also read: Arada awards Dh1.48 bn contracts to build final phases of Masaar
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