Sobha Realty’s $750 Million Green Sukuk Breaks Global Real Estate Record

Sobha Realty has achieved a milestone with its largest-ever issuance of a $750 million green sukuk, marking the highest such issuance by any real estate developer globally. The five-year Islamic bond, issued under a $1.5 billion Trust Certificate Issuance Programme, attracted orders worth approximately $2.1 billion—nearly 2.8 times the issue size—allowing pricing to tighten by 50 basis points from initial guidance. The sukuk carries a profit rate of 7.125 per cent per annum, translating to an effective yield of 7.375 per cent. Regional investors took 56 per cent of the allocation, with the remainder going to international participants. The sukuk will be dual-listed on the London Stock Exchange and Nasdaq Dubai.

The proceeds are earmarked for financing or refinancing projects that qualify under Sobha Realty’s Green Financing Framework, aligned with International Capital Market Association Green Bond Principles and Loan Market Association Green Loan Principles. An independent Second Party Opinion from DNV confirmed the issuance’s adherence to market best practices. Credit agencies are assigning expected ratings of Ba2 from Moody’s and BB from S&P, in line with ratings for PNC Investments LLC, the obligor.

A consortium of regional and international banks facilitated the issuance. Dubai Islamic Bank, Emirates NBD Capital, J. P. Morgan Securities, Mashreqbank and Standard Chartered Bank served as Joint Global Coordinators. Thirteen institutions, including First Abu Dhabi Bank, Deutsche Bank and Abu Dhabi Commercial Bank, supported as Joint Lead Managers and Bookrunners. Deutsche Bank and Emirates NBD Capital additionally took on roles as Joint ESG Structuring Coordinators. Legal counsel was provided by Clifford Chance and Dentons, while Grant Thornton served as auditor.

Investor appetite for sustainable financing in the Middle East is on the rise, reflected in the strong demand for the green sukuk and tightening of pricing. The success of Sobha Realty’s $750 Million Green Sukuk Breaks Global Real Estate Record, as echoed in internal communications and market commentary, underscores the growing convergence of real estate financing with environmental, social and governance considerations.