Sobha Realty's $750M Green Sukuk Sets New Benchmark

Sobha Realty has made a resounding entry into global debt markets with the successful issuance of its inaugural $750 million green sukuk, a landmark transaction that has emerged as the largest green sukuk by a real estate developer so far globally till date.

The five-year issuance, maturing in 2030, attracted extraordinary interest from investors, generating orders worth around $2.1 billion, more than 2.8 times the issue size.

The sukuk was priced at a profit rate of 7.125 per cent with an effective yield of 7.375 per cent, following a tightening of 50 basis points from initial guidance. The overwhelming demand reflected strong investor confidence in Sobha's credit story, with allocations split between 56 per cent regional investors and 44 per cent international participants. The instrument will be listed on both the London Stock Exchange and Nasdaq Dubai, giving it wide visibility across global capital markets.

Proceeds from the issuance will be deployed towards projects aligned with Sobha's Green Financing Framework, which has been validated by DNV and is consistent with international standards such as the ICMA Green Bond Principles and the LMA Green Loan Principles.

Chairman Ravi Menon said the achievement underscored Sobha's dual commitment to financial strength and sustainability.“This transaction is not just a financing initiative; it is a strategic alignment of our capital structure with our values. It enables us to accelerate our ESG agenda, funding projects that deliver tangible environmental benefits and supporting the UAE's Net Zero by 2050 vision,” he said.

Sobha's sukuk is expected to be rated Ba2 (Stable) by Moody's and BB (Stable) by S&P, mirroring the corporate ratings of its parent, PNC Investments LLC. The issuance was coordinated by a consortium of global and regional banking heavyweights, including Dubai Islamic Bank, Emirates NBD Capital, J.P. Morgan, Mashreq, and Standard Chartered, while Clifford Chance and Dentons acted as legal advisers and Grant Thornton served as auditor.

The transaction comes amid a flurry of activity in the UAE's property-linked sukuk market, which has increasingly become a magnet for global capital. Just months earlier, Aldar Investment Properties successfully priced a $500 million green sukuk with a 10-year tenor that drew an extraordinary $3.6 billion in orders, oversubscribed more than seven times. Similarly, Damac Real Estate Development raised $750 million through a sukuk earlier this year, attracting over $2.3 billion in demand and pricing at 7 per cent.

Sobha itself had already tested the waters earlier in 2025 with a $500 million conventional sukuk, which was nearly three times oversubscribed. Other UAE developers have also joined the race, with Binghatti and Arada tapping markets in recent months.

Market experts said the surge in demand for these instruments also speaks to the UAE's growing role as a hub for sustainable Islamic finance.“By combining the appeal of sukuk with green project funding, issuers like Sobha are aligning with both investor expectations and the nation's long-term climate goals.”

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