Arada Developments has completed its second public financing deal, issuing a $400 million Sukuk. This marks the first issuance under Arada’s new $1 billion Sukuk programme, with the five-year fixed rate RegS Sukuk listed on both the London Stock Exchange and Nasdaq Dubai.
The Sukuk was priced at par with an 8.000% coupon. This pricing was tighter than the initial guidance of 8.675%, resulting in a spread of 355 basis points over US Treasuries. The trade achieved significant price tightening, one of the highest for a real estate issuer from the GCC, with a spread of more than 150 basis points inside the debut Sukuk pricing.
According to the statement, proceeds from the Sukuk will be used to manage existing bilateral funding, support general corporate purposes, and support development at Arada’s existing projects.
The Sukuk saw strong demand, attracting a subscription order book of $1.45 billion, which is 3.5 times the offer size, the developer said. Investor interest was geographically diverse, with participation from Europe, the Middle East, and Asia. Investors included institutional investors, fund managers, high-net-worth individuals (HNWIs), and banks.
“We are pleased to have enjoyed a successful return to the market with the closure of our second sukuk,” said HRH Prince Khaled bin Alwaleed bin Talal, Vice Chairman of Arada. “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.”
Since its launch in 2017, Arada has developed six major projects in Sharjah and Dubai, with a combined sales value of Dh60 billion. Notable projects include:
- Sharjah’s largest mixed-use megaproject, Aljada.
- The UAE’s first forested community, Masaar.
- The ultra-luxury Armani Beach Residences at Palm Jumeirah.
In 2023, Arada reported a 100% increase in property sales value, reaching Dh7.02 billion, compared to the previous year. Since its inception, Arada has sold 14,000 units valued at over Dh17 billion, with over 9,000 units completed.
