Aldar's $500 Million Green Sukuk Attracts Overwhelming Investor Demand

(MENAFN- The Arabian Post)

Aldar investment Properties , a subsidiary of Aldar Properties, has successfully issued a $500 million 10-year green sukuk, significantly enhancing its financial standing. The issuance witnessed remarkable investor interest, with the order book surpassing $3.6 billion, indicating an oversubscription rate of 7.2 times. Regional investors accounted for 61% of the allocations, while international investors took up the remaining 39%.

The sukuk was competitively priced at a spread of 110 basis points over the 10-year US Treasury yield, resulting in a coupon rate of 5.25%. This pricing aligns with AIP's previous green sukuk issuance in May 2024, which also achieved a similar spread, reflecting the company's strong financial position and disciplined capital management.

The proceeds from this issuance are earmarked for refinancing sustainability-accredited real estate within AIP's portfolio, in line with Aldar's Green Finance Framework. To date, Aldar has invested over AED 150 million in retrofitting 67 properties to enhance energy efficiency and reduce emissions, underscoring its commitment to sustainable growth.

The strong demand for the sukuk was bolstered by Moody's reaffirmation in January of investment-grade ratings for both Aldar and AIP, at Baa2 and Baa1 respectively, with a stable outlook. This marks the third issuance under Aldar's $2 billion Trust Certificate Issuance Programme, further solidifying the company's reputation in the capital markets.

Faisal Falaknaz, Chief Financial and Sustainability Officer at Aldar Properties, commented on the issuance, stating that the company's ability to secure favorable capital costs amidst global market volatility underscores its robust financial health and strategic approach to capital management. He noted that the substantial demand for the green sukuk reflects investor confidence in Aldar's strategy and its dedication to sustainable growth that delivers tangible benefits to stakeholders and communities.

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The funds raised will also support the early redemption of a sukuk maturing in September 2025 and the repayment of outstanding bank debt, thereby optimizing Aldar's debt maturity profile and reinforcing its financial resilience. This move aligns with the company's broader strategy to maintain a strong balance sheet while pursuing sustainable development initiatives.

The issuance saw participation from a consortium of financial institutions. JP Morgan and Standard Chartered acted as joint global coordinators, while Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Ajman Bank, Bank ABC, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, KFH Capital, Mashreq, and Sharjah Islamic Bank served as joint lead managers and book runners.

Since the beginning of 2025, Aldar has raised AED 16.3 billion in new liquidity across its capital structure, underscoring its commitment to sustainable growth and financial resilience. This capital influx positions the company to continue its strategic investments in sustainability and innovation, further cementing its leadership position in the real estate sector.

Aldar's proactive approach to sustainability is evident in its comprehensive Green Finance Framework, which guides investments in green buildings, energy-efficient property upgrades, sustainable water management, pollution control measures, and renewable energy sources. These initiatives are integral to Aldar's Net Zero Plan, aiming to achieve net-zero carbon emissions across its operations by 2050.

The successful issuance of the green sukuk not only reflects Aldar's strong financial standing but also highlights the growing investor appetite for sustainable investment opportunities in the region. As environmental, social, and governance considerations become increasingly central to investment decisions, Aldar's commitment to sustainability positions it favorably among global investors seeking responsible investment avenues.

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In addition to its financial achievements, Aldar has made significant strides in its sustainability journey. The company has invested substantially in retrofitting its properties to enhance energy efficiency, reflecting its dedication to reducing its environmental footprint. These efforts are part of a broader strategy to align with global sustainability standards and contribute positively to environmental conservation.

via Greenlogue

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