Aldar Investment Properties, the real estate unit of Aldar Properties, has raised $500 million through its first green sukuk. The 10-year issuance is part of a $2 billion financing program to support growth and sustainability goals, in line with the UAE Net Zero by 2050 initiative. Aldar aims to be a net-zero carbon business by 2050.
Aldar's recent issuance, carrying a 4.875 percent coupon rate, garnered strong interest from local, regional, and international investors. The deal was oversubscribed four times, with the orderbook exceeding $2.3 billion. By implementing a successful pre-hedging strategy during 2021 and 2022, Aldar achieved a significantly lower effective funding cost. This strategy took advantage of lower long-term interest rates, bringing the effective interest rate down to 3.85 percent, according to the company.
Why it matters
Aldar will use the transaction proceeds in line with their Green Finance Framework, focusing on sustainable projects like green buildings, energy efficiency, water management, pollution control, and renewable energy sources. This marks Aldar's return to international capital markets and reflects investor confidence in their business and environmental standards. GCC companies are raising green financing to support growth and meet net zero commitments.