Arada has successfully completed the issuance of its first public financing deal, a $350 million sukuk, which has been listed on the London Stock Exchange.
By closing this sukuk, 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.
The deal, which reopened the MENA US dollar markets after a six-week hiatus, was also the first US dollar corporate sukuk globally in 2022.
“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,” said Prince Khaled bin Alwaleed bin Talal, Vice Chairman of Arada.
“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,” he added.
The sukuk issuance saw strong demand from both regional and international investors, with a subscription order of $720m, more than two times the offer size.
Investor-interest in the sukuk was diversified geographically, coming from Europe, the Middle East, and Asia. The investors for this issuance include institutional investors, fund managers, high net worth individuals and banks.
The sukuk’s proceedings 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.
The successful issuance took place shortly after Moody’s and Fitch assigned Arada first-time credit ratings, of B1 and B+ respectively, both with a stable outlook.
Since its launch in 2017, Arada has launched three master-planned projects in Sharjah, with a combined sales value of AED33.5bn.
In January this year, Arada announced the purchase of a plot of land on Dubai’s The Palm Jumeirah, in line with the company’s stated intention to diversify into new markets.
The developer is targeting a year-on-year 25 percent increase in the value of property sold in 2022 to AED3bn 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 AED7bn. The developer has completed 2,500 units, with another 27,500 homes in the pipeline. In May, Arada was awarded two major contracts totalling $125.23m (AED460m) to build 430 villas and townhouses within the first residential district at Masaar, Sharjah’s forested megaproject.
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