Arada's $400m sukuk reopens UAE property debt market

Arada has reopened the Gulf real estate debt market with a $400 million senior unsecured sukuk, the first bond issuance by a UAE property developer since regional conflict broke out in February 2026. The Sharjah-based developer sold the paper to investors in the region and beyond, a signal that international lenders remain willing to back the sector despite a turbulent backdrop.

The five-year, fixed-rate Reg S sukuk carries an 8.875% coupon, tightened from initial price thoughts of 9.375% after the order book closed above $700 million, excluding interest from joint lead managers. Demand came from a diversified base of regional and international investors, which underpinned the issuer’s ability to price well inside its opening guidance. Fitch rates the new paper BB-, while Moody’s assigns it B1; at the corporate level, Arada is rated B+ by Fitch and B1 by Moody’s.

The transaction also functions as a balance sheet tool rather than pure new borrowing. Arada describes the issuance as largely leverage-neutral, with part of the proceeds earmarked for a capped tender offer of up to $180 million on its existing sukuk. That sits within a broader debt management strategy ahead of a $411.7 million, 8.125% sukuk maturing in June 2027, giving the company a refinancing runway nearly two years before that obligation falls due.

Meanwhile, the new paper has been listed on both the London Stock Exchange and Nasdaq Dubai, widening its reach to institutional investors across jurisdictions.

Prince Khaled bin Alwaleed bin Talal Al Saud, Arada’s Executive Vice Chairman, framed the deal as proof of the company’s standing with capital providers. “Our return to the international debt markets is a testament to the resilience of Arada’s business and the enduring confidence of regional and global investors not just in our story, but in UAE real estate more generally,” he said. “Despite a period of significant disruption across the region, we were able to attract strong demand from a diversified investor base, and we are grateful for that continued trust as we pursue our next phase of growth.”

The banking syndicate behind the deal reflects a mix of regional and international houses. Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, Mashreq and Standard Chartered Bank served as joint global coordinators. A second tier of joint lead managers and bookrunners included Arab Bank, Arqaam Capital, Bank ABC, Goldman Sachs International, JP Morgan Securities, Sharjah Islamic Bank and Warba Bank.

For market watchers, the issuance carries weight beyond a single borrower’s funding needs. As the first UAE developer trade since February 2026, it offers a read on investor appetite for Gulf real estate credit at a moment of geopolitical strain. The oversubscribed book, tighter pricing and dual listing all point to functioning demand for the sector’s risk. Whether other developers follow Arada back into the market will depend on conditions holding, but the transaction has at least established a pricing reference at 8.875% for five-year regional property paper.