Sharjah’s Arada raises $350m via dollar sukuk, lists on London Stock Exchange

Sharjah-based developer Arada has completed the issuance of a $350m sukuk, which has been listed on the London Stock Exchange.

The dollar-denominated sukuk was priced at par with a coupon of 8.125 per cent, inside the initial guidance area of 8.25 per cent for a spread of 530 bps over Treasuries. The five-year fixed rate RegS debut sukuk issuance was rated BB- by Fitch and B1 by Moody’s.

The issuance saw strong demand from regional and international investors, with a subscription order of $720m, more than two times the offer size. The deal was the first US dollar corporate sukuk globally in 2022.

Arada has successfully closed its debut public financing deal, raising $350 million via the first USD Corporate Sukuk globally this year. It marks the first Corporate issuance from Sharjah for 5 years & saw strong interest from investors around the world. https://t.co/JaWK0XiIJj

— Arada (@AradaLiving) June 1, 2022

Investor interest in the instrument came from Europe, the Middle East, and Asia, and include institutional investors, fund managers, High Net Worth Individuals (HNWIs), and banks. The proceeds for the sukuk will be used for the management of existing bilateral funding, general corporate purposes and to support the development of Arada’s existing projects.

The joint global coordinators for the sukuk were Standard Chartered Bank, Dubai Islamic Bank, and Emirates NBD Capital, while Abu Dhabi Commercial Bank, Ajman Bank, Al Rajhi Capital, Mashreq, Sharjah Islamic Bank, Kamco Invest, and Warba Bank acted as joint lead managers and bookrunners.

Arada also becomes Sharjah’s first corporate issuer for five years, the first real estate issuer from the region in 2022, and the first US Dollar Benchmark non-sovereign issuer in two months, official news agency WAM reported.

Prince Khaled bin Alwaleed bin Talal, vice chairman of Arada, said, “The closure of our debut sukuk on the London Stock Exchange is an exceptional endorsement from international institutional investors of both Arada’s track record and its future prospects. We are delighted that this issuance has appealed to the market appetite for stable companies with a good history of strong management, transparency, and good governance.”

Since its launch in 2017, Arada has launched three master-planned projects in Sharjah, with a combined sales value of Dhs33.5bn. In January, Arada announced the purchase of a plot of land on Dubai’s The Palm Jumeirah megaproject.

Read: Sharjah’s Arada enters Dubai property market, purchases Dhs240m land at Palm Jumeirah

The developer is targeting a year-on-year 25 per cent increase in the value of property sold in 2022 to Dhs3bn and is also aiming to complete 4,000 homes during the course of the year. In total, Arada has sold just under 10,000 units since inception, valued at over Dhs7bn.