Aldar Investment Properties raises $500 million with green sukuk

Aldar Investment Properties (AIP) announced on Thursday the successful issuance of a $500 million 10-year green Sukuk (Islamic bond). AIP is a subsidiary of Aldar Properties PJSC, owning and managing a portfolio of income-generating properties valued at AED 28 billion (approximately $7.6 billion). This strategic move reinforces AIP's commitment to sustainable finance and growth.

The bond issuance was oversubscribed by 7.2 times, attracting orders totaling $3.6 billion. Regional and international investors accounted for 61% and 39% of the total transaction allocation, respectively. This strong investor interest highlights confidence in Aldar's financial strategy and future prospects.

The Sukuk has a competitive coupon rate of 5.25%, priced at a spread of 110 basis points over 10-year U.S. Treasuries, consistent with the green Sukuk issued in May 2024. At that time, Aldar achieved its tightest ever spread on a public debt offering. Moody's reaffirmed Aldar's and AIP's investment grade ratings of Baa2 and Baa1, respectively, with a stable outlook in January of this year, further supporting strong investor demand.

Faisal Falaknaz, Chief Financial and Sustainability Officer of Aldar Properties, stated, "Aldar's ability to consistently secure favorable cost of capital, even amidst global market volatility, underscores our robust financial position and disciplined capital management. The strong demand for our latest green Sukuk clearly demonstrates investor confidence in our strategy and commitment to sustainable growth, which delivers real value for our stakeholders and communities." This reflects Aldar's dedication to responsible investment and long-term value creation.

The proceeds from the issuance will be deployed in accordance with Aldar's Green Finance Framework, which guides a broad range of sustainability initiatives, including Aldar's ongoing investments in optimizing energy efficiency. To date, Aldar has invested over AED 150 million in retrofitting 67 properties with new measures to optimize energy efficiency and reduce emissions, in line with the company’s net-zero targets. This new bond issuance will support the early redemption of a Sukuk maturing in September 2025 and the repayment of outstanding bank debt.

JPMorgan and Standard Chartered Bank acted as Joint Global Coordinators and, together with Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Ajman Bank, Arab Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, KFH Capital, Mashreq Bank, and Sharjah Islamic Bank, served as Joint Lead Managers and Bookrunners. The green Sukuk aligns with Aldar's broader financial strategy of driving sustainable growth, with the company having raised AED 16.3 billion in new liquidity in its capital structure since the beginning of the year.