Al Dar Real Estate Investment issues green sukuk worth $500 million

Al Dar Real Estate Investment issues green sukuk worth $500 million
Al Dar Real Estate Investment issues green sukuk worth $500 million

Aldar for Emirati real estate investment has issued green sukuk for 10 years, at a value of $500 million, as part of the new financing program issued by the company at a value of $2 billion, to finance initiatives and acquisitions in environmentally friendly projects.

The company stated, in a statement published today, Thursday, on the Abu Dhabi Securities Exchange website, that the green sukuk profit rate for 10 years has been set at 4.875%, which is among the lowest profit rates for any company issuance in 2023.

She added that based on this price, the actual financing cost of Aldar Real Estate Investment Company will be much lower than the market average, as a result of the proactive hedging strategy that was implemented in 2021 and 2022 when long-term interest rates were significantly low, and the future swaps contracts implemented by the company will reduce the rate. The actual profit of the issue is 3.85%.

The issuance of sukuk came after promotional meetings with international investors, which led to the demand for it exceeding the volume of supply by 4 times, amid clear demand from a wide range of local, regional and international investors, whose total value of requests amounted to more than $ 2.3 billion.

Sustainability programme

Aldar Real Estate Investment pointed out that the sukuk is part of a financing program worth two billion dollars to support growth plans and implement sustainability initiatives, in line with the goals of the Paris Climate Agreement, the UAE’s strategic initiative to achieve climate neutrality by 2050, and its plan to achieve net zero emissions to become carbon-free after 27 years. year from now.

Back to the debt markets

Faisal Falaknaz, Acting Chief Financial Officer and Sustainability Officer at Aldar Properties, confirmed that this issuance marks Aldar’s return to the global capital markets for the first time since 2019, and it is the first standard sukuk issuance issued by a company in Abu Dhabi since 2020. It is also the company’s first green issuance. .

He added that Aldar Properties will continue to finance energy efficiency measures through its real estate portfolio, and that green financing initiatives will allow it to intensify its efforts for climate action.

Aldar Real Estate Investment Company, through its diversified portfolio of real estate assets worth more than 23 billion dirhams ($6.3 billion), benefits from Moody’s investment grade rating of (Baa1).

Aldar Properties launched the Net Zero Emission Plan in January 2023, committing to becoming a carbon-neutral company with “net zero emissions” within greenhouse emissions scopes 1, 2 and 3 by 2050.

The net zero emissions plan identifies the mechanisms used to achieve Aldar’s goals with regard to reducing carbon emissions, whether direct emissions or carbon emissions resulting from its development projects, as well as emissions related to its supply chain operations and tenants.

Release managers

Aldar Properties appointed Banky H. s. with me. C and Standard Chartered are joint global coordinators, and have appointed Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank and Mashreq as joint lead managers and joint bookrunners.

Issuance of Islamic debt instruments by Gulf borrowers has increased recently, as banks look to tap a broader investor base and meet demand for this short-supplied asset class.