Sharjah’s Arada raises $50m from second tap of existing $450m sukuk

Sharjah-based real estate developer Arada has successfully completed the second tap of its $450m sukuk, which was issued in June 2022 and listed on the London Stock Exchange. The second tap raised $50m, bringing the total size of the sukuk to $500m.

This is the developer’s third foray into the capital markets in the last nine months and the investor reoffer yield was 8.488 per cent.

In October 2022, Arada raised $100m in a first tap which received an overwhelming response from the international debt capital market, resulting in an oversubscribed transaction with orders worth $185m.

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

The second tap was executed based on investor feedback and inquiries, following extensive roadshows across the UK and GCC.

Arada has closed a $50m 2nd tap of our existing $450m sukuk, which was issued last June and listed on the London Stock Exchange. The tap brings the issuance to benchmark size and shows the global investor interest in our track record and growth story. https://t.co/PxTdZJSBuU

— Arada (@AradaLiving) February 13, 2023

Mashreq acted as the sole manager and book runner for the second tap.

Ahmed Alkhoshaibi, group CEO of Arada, expressed his satisfaction with the outcome, saying, “We are thrilled to have raised $500m through the two tap transactions on our inaugural sukuk. This demonstrates that investors have been following our story since May 2022 and recognise our investor proposition, good governance record, and credit strength.”

The five-year fixed rate RegS debut sukuk was rated BB- by Fitch and B1 by Moody’s and the proceeds from the sukuk will be used for general corporate purposes and to support Arada’s ongoing projects.

In May 2022, Moody’s and Fitch assigned the developer its first-ever credit ratings, B1 and B+ respectively, both with a stable outlook.

Arada: consistent growth since inception

Since its launch in 2017, the developer has launched four successful master-planned projects in Sharjah and Dubai, with a combined sales value of Dhs37bn.

The developer also recorded a 46 per cent increase in the total value of property sold in 2022 against the previous year to Dhs3.51bn.

In total, Arada has sold over 11,000 units since its launch, valued at over Dhs10bn. The developer has completed 6,800 units, with another 23,200 homes in the pipeline.

Other highlights

The developer recently opened the first permanent Manbat Shop at the Aljada master community in New Sharjah.

The shop, set in the first residential phase of Aljada, enables Manbat’s goal to set up a bridge between local farmers and consumers in the UAE. The Manbat initiative was launched in January 2021 in partnership with the Ministry of Climate Change and Environment (MOCCAE) and is committed to promoting the performance of the UAE’s agricultural sector.

Read: Sharjah’s Arada opens first permanent Manbat Shop at Aljada, aims to boost UAE’s agri sector

Arada also recently awarded a major contract to build the four buildings in the Vida Aljada hotel complex, located at the Aljada megaproject in Sharjah.

The contract will enable the construction of the 175-room Vida Aljada hotel, as well as 255 branded residences and 149 branded serviced apartments, all of which are based in Aljada’s cultural district.

Read: Sharjah’s Arada awards Dhs475m contract to build Vida Aljada hotel complex

Owned and developed by Arada and operated by Vida Hotels & Resorts, the Vida Aljada is the first of three Emaar Hospitality properties that will be built at Aljada, which include The Address Aljada and Rove Aljada.