Sobha Realty has successfully issued a USD 500 million sukuk under its recently launched USD 1.5 billion Sukuk Issuance Program. The sukuk, which matures in 2029, will be listed on both the London Stock Exchange and Nasdaq Dubai.
Strong investor demand
The sukuk issuance drew strong interest from both regional and international investors, with the order book oversubscribed three times, reaching USD 1.54 billion. Initial price thoughts were set at 8.375%, but high demand led to a 37.5 basis point tightening, resulting in a final yield of 8% per annum.
Investor allocation was split between 61% local and 39% international participants, signalling continued market confidence in both Sobha Realty and Dubai’s broader real estate outlook.
Commenting on the transaction, Mr. Ravi Menon, Chairman of Sobha Group, said: “The successful completion of Sobha Realty’s USD500 million sukuk issuance underscores the continued confidence of the investor community in our financial stability and strategic direction.
“Our strategy, underpinned by our Backward Integration model, continues to yield strong financial results, including a substantially healthy revenue backlog, increased topline, and EBITDA generation. This reinforces our long-term commitment to growth and value creation.”
Credit rating outlook
The issuance follows a recent credit rating upgrade of Sobha Realty’s parent company, PNC Investments LLC, by Moody’s from Ba3/stable to Ba2/stable in April 2025. In line with this, the sukuk is expected to carry a Ba2/stable rating from Moody’s and a BB/stable rating from S&P.
The issuance was managed by a consortium of banks, including Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Arqaam Capital, Dubai Islamic Bank, Emirates NBD Capital, J.P. Morgan, Mashreq, RAKBANK, Sharjah Islamic Bank, Standard Chartered Bank, and Warba Bank.
Sobha Realty also appointed Clifford Chance and Dentons as legal counsels and Grant Thornton as the financial auditor, underscoring its focus on governance and transparency.
