Aldar Investment Properties (AIP) has successfully raised $500 million through a 10-year green sukuk, it announced on Thursday.
AIP is a subsidiary of Aldar Properties PJSC and owner-manager of an AED28 billion ($7.6 billion) portfolio of income-generating properties.
Strong response
The issuance was oversubscribed 7.2 times, attracting $3.6 billion in orders, with regional and international investors representing 61 percent and 39 percent of the total transaction allocation, respectively.
Read: Aldar’s 2024 net profit jumps 47 percent to $1.77 billion driven by strong pace of cross-platform growth
With a 5.25 percent coupon rate, the sukuk was competitively priced at a spread of 110 basis points over 10-year US Treasuries, in line with a green sukuk issued in May 2024, when Aldar achieved its tightest-ever spread for a public debt issuance.
The strong investor demand was supported by Moody’s reaffirmation in January of investment-grade ratings of Aldar and AIP of Baa2 and Baa1, respectively, with a stable outlook. The transaction marked the company’s third green sukuk issuance under its $2 billion Trust Certificate Issuance Programme launched in May 2023.
Delivering real impact
Faisal Falaknaz, chief financial and sustainability officer at Aldar Properties, commented: “Aldar’s ability to consistently achieve a favourable cost of capital, even in the context of global market volatility, underscores the strength of our financial position and disciplined capital management. The strong demand for our latest green sukuk is a clear sign of investor confidence in our strategy and commitment to sustainable growth that delivers real impact for our stakeholders and communities.”
Deploying proceeds
Proceeds will be deployed in accordance with Aldar’s green finance framework, which guides a broad programme of sustainability initiatives, including Aldar’s ongoing investments in optimizing energy efficiency. To date, Aldar has invested over AED150 million in retrofitting 67 properties with new measures designed to optimize energy efficiency and reduce emissions, in line with the company’s net-zero goals.
The new issuance supports the early redemption of a sukuk maturing in September 2025 and the repayment of outstanding bank debt.
JP Morgan and Standard Chartered acted as joint global coordinators, as well as joint lead managers and bookrunners with 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.
This green sukuk is aligned with Aldar’s broader financial strategy to drive sustainable growth, with the company raising AED16.3 billion in new liquidity across its capital structure since the start of the year.
