Sobha Realty’s $750 Million Green Sukuk Oversubscribed

Sobha Realty, Dubai-based global luxury real estate developer, has announced the successful issuance of its inaugural $750 million Green Sukuk, which will be listed on the London Stock Exchange and Nasdaq Dubai.

This landmark transaction, the largest in the Company’s history and the largest Green Sukuk by a real estate developer globally till date, was executed under its $1.5 billion Trust Certificate Issuance Programme.

The order book for this 5-year Green Sukuk, maturing in 2030, was significantly oversubscribed, reaching approximately $2.1 billion, 2.8 times the issuance size, reflecting strong investor confidence in Sobha Realty’s credit profile and sustainability strategy.

Robust demand from a high-quality investor base, with 56% allocated to regional investors and 44% to international investors, enabled a substantial price tightening of 50 basis points from Initial Price Thoughts (IPTs). The Sukuk was priced at a profit rate of 7.125% per annum, with an effective yield of 7.375% per annum.

The net proceeds from this Green Sukuk will be allocated to financing or refinancing eligible green projects as defined in Sobha Realty’s Green Financing Framework.

This framework, aligned with the International Capital Market Association (ICMA) Green Bond Principles and the Loan Market Association (LMA) Green Loan Principles, received an independent Second Party Opinion (SPO) from DNV, confirming its alignment with market best practices.

Powerful Testament

Sobha Group Chairman Ravi Menon said that the resounding success of their inaugural Green Sukuk issuance is a powerful testament to the market’s recognition of Sobha Realty’s robust financial standing the company’s deep, unwavering commitment to sustainable development.

“This transaction is not just a financing initiative; it is a strategic alignment of our capital structure with our core values. It enables us to accelerate our ambitious ESG agenda, funding projects that will deliver tangible environmental benefits and solidify our position as a leader in crafting sustainable luxury communities. This milestone reinforces our dedication to creating long-term value for all our stakeholders while contributing positively to the UAE’s Net Zero by 2050 Strategic Initiative,” he added.

The Sukuk issuance is expected to be rated Ba2 (Stable) by Moody’s and BB (Stable) by S&P, in line with the corporate credit rating of the obligor, PNC Investments LLC.

It may be recalled that in May this year, the company issued $500 million Sukuk under it’s the $1.5 billion Sukuk Issuance Program, which was listed on the London Stock Exchange (LSE) and NASDAQ Dubai. For this $500 million 2029 maturity sukuk issuance, the order book was oversubscribed three times to reach $1.54 billion.

Initial Price Thoughts (IPTs) were set at 8.375%. However, strong interest from regional and international investors led to a notable price tightening of 37.5 basis points, bringing the effective yield to 8% p.a. Of the total issuance, 61% has been allocated to local and 39% to international investors, respectively.