Arada Developments LLC (“Arada”), rated B1 by Moody’s and B+ by Fitch, has successfully issued its second public financing deal, a $400 million Sukuk. This issuance, the first under Arada’s newly established $1 billion Sukuk programme, is listed on both the London Stock Exchange and Nasdaq Dubai.
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%, inside the initial guidance area of 8.675%, reflecting a spread of 355 basis points over US Treasuries. This trade achieved one of the highest price tightenings by a real estate issuer from the GCC and was priced with a spread over 150 basis points inside the previously priced debut Sukuk.
The proceeds from the Sukuk will be allocated towards managing existing bilateral funding, general corporate purposes, and supporting development at Arada’s existing projects.
The Sukuk issuance garnered strong demand from both regional and international investors, with a subscription order book of $1.45 billion, 3.5 times the offer size. The investor interest was geographically diverse, attracting institutional investors, fund managers, High Net Worth Individuals (HNWIs), and banks from Europe, the Middle East, and Asia.
Prince Khaled bin Alwaleed bin Talal, Vice Chairman of Arada, remarked, “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.”
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 served as Joint Lead Managers and Bookrunners.
Since its launch in 2017, Arada has initiated six successful projects in Sharjah and Dubai, with a combined sales value of AED 60 billion. These projects 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, Arada announced a 100% increase in the total value of properties sold, reaching AED 7.02 billion compared to the previous year. To date, Arada has sold 14,000 units valued at over AED 17 billion, with over 9,000 units completed.
