Arada secures $150 million through sukuk tap issuance
The additional issuance of sukuk, Islamic bonds, saw strong demand, primarily from institutional investors across the Middle East and Europe. Arada’s latest financing strategy aims to capitalize on the growing demand for high-quality, Sharia-compliant investment opportunities while simultaneously supporting its aggressive development pipeline. This fundraising effort is part of a broader financial strategy to strengthen the company's capital position and finance its ambitious real estate projects.
The company, founded in 2017, has quickly established itself as a key player in the UAE’s real estate market. With flagship developments such as Aljada, Masaar, and Nasma Residences, Arada has gained a reputation for delivering high-quality residential, commercial, and hospitality projects that cater to the increasing demand for housing and leisure amenities in Sharjah and the broader UAE region. The additional funding from this sukuk tap will help advance these projects, further solidifying Sharjah’s position as a rising hub for real estate investment and development.
As part of the company’s strategy, proceeds from the sukuk tap will be allocated towards both existing and new development projects, ensuring that the necessary financial resources are available for timely completion. This includes ongoing construction at Aljada, the developer’s largest project, which aims to house over 70,000 residents upon completion, as well as the upscale Masaar community, known for its integration of smart technology and eco-friendly design.
The sukuk tap was priced at a profit rate of 8.125%, consistent with the original issuance in June 2022. Market analysts observed that the pricing reflects the strong confidence investors have in Arada’s business model and its ability to navigate the evolving economic landscape. Despite challenges posed by the global economic slowdown and rising interest rates, demand for Arada’s sukuk remains robust, driven by its strong fundamentals and a track record of delivering on its development promises.
Experts note that the success of this sukuk tap issuance reflects broader market trends favoring Islamic finance. Sukuk offerings have surged in popularity in the Gulf region and globally, as investors seek Sharia-compliant financial products that offer a balance between ethical investing and solid returns. In particular, the UAE has become a central hub for sukuk issuances, attracting a wide range of investors from both the region and international markets.
Arada’s chairman expressed optimism following the successful issuance, noting that the proceeds from the sukuk will play a critical role in supporting the company’s expansion plans. With the funds secured, Arada is well-positioned to push forward with its pipeline of projects, including the delivery of new residential and commercial units. He reiterated the company’s commitment to contributing to Sharjah’s development as a premier destination for both living and investment, while aligning with the broader economic diversification goals set by the UAE government.
Industry observers point out that the timing of the sukuk tap aligns with favorable market conditions. The real estate sector in Sharjah, traditionally more affordable than Dubai and Abu Dhabi, has experienced significant growth, driven by demand for family-friendly communities, better infrastructure, and quality developments. Arada’s focus on mid-to-high-end projects has allowed it to capture a substantial share of this growing market, attracting investors, homeowners, and renters alike.
The demand for property in Sharjah has increased significantly, with buyers seeking alternatives to the higher prices in neighboring emirates. Arada’s developments have gained particular attention for their modern design, sustainability features, and strategic locations within Sharjah. The company’s ability to deliver projects on time and to high standards has fostered trust among investors and buyers, further driving the success of its financial ventures, such as the sukuk tap.
The company has placed a strong emphasis on sustainability, integrating eco-friendly practices into its construction processes and the design of its developments. This commitment to green building and energy efficiency has resonated with environmentally conscious investors and buyers, adding to the appeal of Arada’s projects. The proceeds from the sukuk tap will support ongoing efforts to implement these sustainability measures across its portfolio, contributing to the UAE’s broader goal of promoting environmentally responsible growth.
The sukuk tap also highlights the growing trend of Islamic finance in real estate development, as developers and investors alike turn to Sharia-compliant instruments to finance large-scale projects. The success of Arada’s sukuk issuance reinforces the strength of Islamic finance as a viable alternative to conventional financing in the region’s booming real estate market.
Join the conversation