Arada Developments LLC (“Arada”), with a B1 rating from Moody’s and B+ from Fitch, has successfully concluded its second public financing arrangement, a $400M Sukuk, listed on the London Stock Exchange and the Nasdaq Dubai. This marks the first issuance under Arada’s new $1B Sukuk programme.
The five-year fixed-rate RegS Sukuk issuance, rated BB- by Fitch and B1 by Moody’s, was priced at par with an 8.000% coupon, lower than the initial guidance of 8.675%, translating to a spread of 355 bps over US Treasuries. This trade saw significant price tightening by a real estate issuer from the GCC, and priced with a spread over 150bps narrower than the previous debut Sukuk.
Proceeds from the Sukuk will be allocated to manage existing bilateral funding, general corporate purposes, and support development in Arada’s ongoing projects.
The Sukuk issuance attracted robust demand from both regional and international investors, resulting in a subscription order book of $1.45B, 3.5 times larger than the offer size.
Prince Khaled bin Alwaleed bin Talal, Vice Chairman of Arada, commented, “We are pleased to have achieved a successful return to the market with our second sukuk closure. This landmark issuance reaffirms the strong interest from institutional investors globally in Arada’s consistent performance, solid governance, and compelling growth trajectory.”
Investor interest in the Sukuk was geographically diverse, spanning Europe, the Middle East, and Asia. The investor base 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, while Arab Bank, Kamco Invest, Mashreq, RAK Bank, Sharjah Islamic Bank, and Warba Bank served as Joint Lead Managers and Bookrunners.
Since its inception in 2017, Arada has successfully launched six projects in Sharjah and Dubai, with a combined sales value of $60B. Notable projects include Aljada, Sharjah’s largest mixed-use development; Masaar, the UAE’s first forested community; and Armani Beach Residences at Palm Jumeirah.
In 2023, the master developer reported a 100% increase in total property sales value to $7.02B compared to the previous year. To date, Arada has sold over 14,000 units worth $17B, with over 9,000 units completed.
