Aldar issues second $500m green sukuk

Image: Aldar

Real estate management company and subsidiary of Aldar Properties, Aldar Investment Properties (AIP), has issued a $500m green sukuk as a part of its $2bn Trust Certificate Issue Programme established in 2023.

The 10-year issuance marks AIP’s second green sukuk, following its inaugural $500m sukuk issued in May last year.

Read: Aldar Investment Properties raises $500m from inaugural green sukuk

Priced with a 5.500 per cent coupon rate, the new issuance achieved the tightest credit spread ever secured by the company at 110 basis points and garnered four times oversubscription, reflecting robust interest from both regional and international investors.

The overwhelming demand, coupled with the tight credit spread, underlines the robust fundamentals of the Aldar business and the market’s confidence in the company’s ability to uphold its environmental, social, and governance (ESG) commitments.

In conjunction with the issuance, the company initiated a buy-back of the sukuk maturing in September 2025, offering existing investors the opportunity to participate in the new issuance.

The proceeds will be utilised by Aldar to refinance existing debt and extend its debt maturity profile.

Faisal Falaknaz, chief financial and sustainability officer at Aldar Properties, stated, “The overwhelming response to our latest green sukuk issuance reflects the market’s confidence in Aldar and the trust that exists in our ability to deliver our wide-ranging sustainability initiatives.

“It not only demonstrates our continued focus on driving positive environmental impact for the communities we serve but also underscores our ability to deliver value for our investors over the long term, with this issuance achieving the tightest credit spread we have ever priced.”

Aldar: Proceeds to support green buildings, energy-efficient property upgrades

Aligned with the company’s inaugural green sukuk, the proceeds from this issuance will be channelled according to its Green Finance Framework, supporting investments in sustainable projects such as green buildings, energy-efficient property upgrades, sustainable water management, pollution control measures, and renewable energy sources.

With a diverse portfolio of income-producing real estate assets valued at over Dhs25bn, AIP maintains a robust financial position supported by its Baa1 investment grade credit rating from Moody’s.

Over the past year, the company achieved 47 points on the Dow Jones Sustainability Index (DJSI), retaining its top position in the GCC and ranking within the top quartile of the 299 global real estate companies assessed.

Additionally, it maintained a low-risk score of 15.9 on the Sustainalytics Risk Index and upheld its BBB rating in MSCI.

The company continues to make significant strides towards becoming a net-zero carbon business across its Scope 1, Scope 2, and Scope 3 greenhouse gas (GHG) emissions by 2050, in alignment with its net zero plan.

In other news, AIP’s parent company, Aldar Properties unveiled Athlon, an innovative ‘active living’ concept designed to promote wellbeing and community engagement in Dubai.

Developed in collaboration with Dubai Holding, Athlon represents the joint venture’s second residential project in Dubai, following the success of Haven by Aldar, launched in late 2023.