Arada Eyes $500 Million Sukuk to Fuel Gulf Land Acquisitions

Arabian Post

2 days ago

Arada Developments, the Sharjah-based property developer, is preparing to raise up to $500 million via an Islamic bond as it joins a wave of Gulf real estate firms turning to debt markets to fund expansion. The group plans to launch the issuance next week to finance new land purchases and capitalise on a construction surge across the United Arab Emirates.
The proposed sukuk issue represents a strategic step for Arada to strengthen its position amid intensified regional economic diversification efforts and an escalating boom in property development across the UAE. With past sukuk issuances drawing strong demand, the company aims to repeat that success to secure favourable financing terms.
Arada previously issued a $400 million sukuk in June 2024 under its $1 billion programme, followed by a $150 million tap in September that attracted an order book exceeding $1.45 billion. In September 2022, the firm also issued a benchmark $500 million debut sukuk, tightening from initial guidance and attracting strong investor interest.
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Regional corporate sukuk issuance has surged, offsetting a dip in sovereign debt. LSEG data show corporate bond and sukuk sales climbed 52% year‑on‑year in the GCC during the first five months of 2025, even as total issuance fell overall. UAE debt issuance grew in the first half of 2025, although green bond and sukuk volumes declined sharply.
Within the UAE, developers such as Sobha Realty and Omniyat also issued $500 million sukuk in May, highlighting strong appetite in the Islamic finance market for real estate funding. The overall trend underlines a rising preference for sharia‑compliant financing instruments to support both corporate needs and state diversification agendas.
Founded in 2017 by Sharjah's deputy ruler Sheikh Sultan bin Ahmed Al Qasimi and Saudi Prince Khaled bin Alwaleed bin Talal Al Saud, Arada has rapidly scaled its presence in Sharjah and Dubai, launching developments valued at AED 60 billion and exploring international expansion into Australia. The company also plans to enter the Australian market fully by the end of 2025.
Arada's prior promises to land acquisitions and project funding seem to extend with this latest sukuk. The proceeds will directly support the acquisition of new land parcels, ensuring the company can sustain its pipeline of projects including township developments, wellness‑focused residential schemes and branded hospitality offerings.
The firm's decision to revert to debt markets follows its move early this month to seek approval for modifications to financial covenants on its existing $500 million trust certificates due 2027. Arada sought to raise leverage limits—net indebtedness to equity and EBITDA ratios—from current 1.5:1 and 3.0:1 to 2.0:1 and 4.0:1 respectively—prompting a consent solicitation that attracted strong holder engagement. A meeting on July 23 in London will finalise this vote.
While global uncertainties—from oil price swings to geopolitical tensions—have weighed on capital markets, Gulf property developers have continued to tap sukuk issuance to spread costs and manage growth. Analysts argue that solid investor interest, particularly from Asia, sovereign wealth diversification and the Emirates' push into non‑oil sectors have sustained this demand.