Sharjah-based property developer Arada Developments LLC has successfully completed the issuance of its second public financing deal, a $400 million Sukuk, which has been listed on the London Stock Exchange and the Nasdaq Dubai.
This issuance 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 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 Gulf region, and also priced with a spread more than 150bps inside Arada’s previously priced debut Sukuk.
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 was diversified geographically, coming from Europe, the Middle East, and Asia, including institutional investors, fund managers, high-net-worth individuals (HNWIs), and banks.
Arada’s project expansion
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, including 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.
Since its launch in 2017, Arada has launched six successful projects in Sharjah and Dubai, with a combined sales value of AED60 billion.
In 2023, the master developer announced a 100 percent increase in the total value of property sold to AED7.02 billion, compared to the previous year.
In total, the developer has sold 14,000 units since inception, valued at over AED17 billion, with over 9,000 units completed.
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