Sharjah-based property developer Arada has successfully closed a $150 million tap of its existing $400 million sukuk, which the company issued in June and listed on both the London Stock Exchange and Nasdaq Dubai. The tap took the issuance over the benchmark size to $550 million.
“Part of our ongoing $1 billion sukuk program, this successful tap underlines our strong governance record, attractive investor proposition, and credit strength,” stated Ahmed Alkhoshaibi, group CEO of Arada.
The tap was priced at $102.54 with a yield of 7.35 percent, representing a 15-basis-point tightening from initial pricing thoughts. The developer noted that excluding joint lead managers’ demand, the subscription order book peaked at over $480 million, 3.2 times the offer size.
High investor demand
Arada’s efforts in engaging investors were most recently evident in the company’s extensive roadshows across the U.K. and the GCC region. During the roadshows, investor feedback and inquiries led to issuing the tap. The tap also follows Arada’s second public financing deal in June, which was priced at 8 percent and received a subscription order book of $1.45 billion, 3.5 times the offer size.
Arada appointed Abu Dhabi Commercial Bank, Dubai Islamic Bank, Emirates NBD Capital, Mashreq, Sharjah Islamic Bank, and Standard Chartered Bank as joint global coordinators for the tap. Meanwhile, the joint lead managers and joint bookrunners for the tap were Abu Dhabi Commercial Bank, Dubai Islamic Bank, Emirates NBD Capital, Mashreq, Sharjah Islamic Bank, Standard Chartered Band and Warba Bank.
The company added that the proceeds for the sukuk tap will go to funding general corporate purposes. Moreover, they will support the development of Arada’s existing projects.
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Arada seeks exponential growth
In 2022, Moody’s and Fitch assigned Arada first-time credit ratings, of B1 and B+ respectively, both with a stable outlook.
Since starting out in 2017, Arada has launched six successful projects in both Sharjah and Dubai, with a total sales value of AED60 billion. Last year, the master developer announced a 100 percent increase in the total value of property sales to AED7.02 billion.
In total, Arada has sold over 14,000 units since inception, with over 10,000 units complete. In August this year, Arada also announced its first overseas expansion into the Australian property market. The developer launched an office in Sydney, alongside a project pipeline worth AED6 billion.
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