Real estate developer Arada successfully closes $100m tap of sukuk issuance

Real estate developer Arada has closed a $100m tap of its existing $350m sukuk, which was issued in June and listed on the London Stock Exchange. The tap was priced at 99 cents on the dollar, with an investor yield of 8.386 per cent.

The tap witnessed resilient demand from the global financial markets, with a lead order of $185m. The proceeds from the tap will be used for general corporate purposes and to support the development of Arada’s existing projects, reported the state news agency, WAM.

Arada’s existing five-year fixed rate RegS debut sukuk issuance was rated BB- by Fitch and B1 by Moody’s.

Ahmed Alkhoshaibi, group CEO of Arada, said, “Arada continues to expand at an extremely rapid pace. To maintain that aggressive growth strategy, we took the decision to tap the markets opportunistically to secure the capital that will guarantee our plans remain on track.”

He added: “This exceptional response and oversubscription from the international debt capital markets is a further sign of faith in Arada’s impressive growth trajectory, fundamentals, and future prospects. We’re especially pleased to have closed this issuance during an uncertain time for global markets, which is again a hugely positive endorsement of our investor proposition, good governance record, and credit strength.”

Since its launch in 2017, Arada has launched three successful 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 luxury megaproject, in line with the company’s stated intention to diversify into new markets.

The developer is on track for a year-on-year 25 per cent increase in the value of the 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 nearly 11,000 units since inception, valued at over Dhs8bn. The developer has completed 2,600 units, with another 27,500 homes in the pipeline.

In other news, Arada recently awarded two major contracts for its Aljada project in Sharjah. The contracts have been awarded to build nine premium apartment blocks in the 24 million square foot mixed-use megaproject located in the emirate’s Muwaileh area.

Read: Arada awards two building contracts valued at Dhs454m in Sharjah’s Aljada project