Arada's $400M Sukuk Attracts Global Investors, Oversubscribed By 3.5 Times

Arada Developments LLC ("Arada"), rated B1 by Moody's and B+ by Fitch, has successfully completed its second public financing deal, issuing a $400 million Sukuk. This issuance, listed on both the London Stock Exchange and Nasdaq Dubai, marks the first 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 8.000%. This was inside the initial guidance area of 8.675%, achieving a spread of 355 basis points over US Treasuries. The trade achieved one of the highest price tightenings by a real estate issuer from the GCC, pricing more than 150 basis points inside the previously priced debut Sukuk.

The proceeds from this Sukuk will be allocated for managing existing bilateral funding, general corporate purposes, and supporting development at Arada's current projects. The issuance saw strong demand from regional and international investors, with a subscription order book of $1.45 billion, 3.5 times the offer size.

Prince Khaled bin Alwaleed bin Talal, Vice Chairman of Arada, commented on the successful return to the market with this second Sukuk closure. He noted that this issuance demonstrates the strong interest from institutional investors worldwide in Arada's stable track record and good governance.

Investor interest for the Sukuk was geographically diversified, attracting participants from Europe, the Middle East, and Asia. The investors included institutional investors, fund managers, High Net Worth Individuals (HNWIs), and banks.

The Joint Global Coordinators for the Sukuk were Abu Dhabi Commercial Bank, Dubai Islamic Bank, Emirates NBD Capital, and Standard Chartered Bank. Arab Bank, Kamco Invest, Mashreq, RAK Bank, Sharjah Islamic Bank, and Warba Bank acted as Joint Lead Managers and Bookrunners.

Arada's Growth and Achievements

Since its launch in 2017, Arada has initiated six successful projects in Sharjah and Dubai with a combined sales value of AED60 billion. These projects include Sharjah’s largest mixed-use megaproject Aljada; the UAE’s first forested community Masaar; and the ultra-luxury Armani Beach Residences at Palm Jumeirah.

In 2023, Arada announced a 100% increase in total property sales value to AED7.02 billion compared to the previous year. In total, Arada has sold 14,000 units since its inception, valued at over AED17 billion, with over 9,000 units completed.

With inputs from WAM