Aldar Investment Properties (AIP), a subsidiary of Aldar Properties, has successfully raised $500 million through a 10-year green sukuk issuance.
Aldar Investment Properties (AIP), a subsidiary of Aldar Properties, has successfully raised $500 million through a 10-year green sukuk issuance. This marks a significant milestone in the company’s commitment to sustainable growth and financial resilience.
The issuance was oversubscribed 7.2 times, attracting orders exceeding $3.6 billion from regional and international investors, showcasing strong confidence in Aldar’s strategy and sustainability initiatives.
The green sukuk was priced at a spread of 110 basis points over the 10-year US Treasury yield, carrying a coupon rate of 5.25%. This issuance mirrors Aldar’s previous green sukuk offering in May 2024, which achieved the company’s tightest-ever spread for a public debt offering. The latest issuance is Aldar’s third under its $2 billion Trust Certificate Issuance Programme.
Moody’s reaffirmed Aldar and AIP’s investment-grade ratings of Baa2 and Baa1, respectively, with a stable outlook in January 2025. This reaffirmation further strengthened investor confidence in Aldar’s financial position and disciplined capital management.
The proceeds from the green sukuk will be utilized in line with Aldar’s Green Finance Framework. This framework governs investments in sustainability-accredited real estate within AIP’s portfolio. Aldar has already invested over AED 150 million in retrofitting 67 properties to enhance energy efficiency and reduce emissions as part of its net-zero goals.
The new issuance will support the early redemption of a sukuk maturing in September 2025 and the repayment of outstanding bank debt. This strategic move aligns with Aldar’s commitment to achieving net-zero carbon emissions across its Scope 1, Scope 2, and Scope 3 greenhouse gas emissions by 2050.
The oversubscription of the green sukuk highlights the growing demand for sustainable investment opportunities. Regional investors accounted for 61% of the allocation, while international investors made up the remaining 39%. This diverse investor base underscores the global appeal of Aldar’s sustainability-focused initiatives.
Faisal Falaknaz, Chief Financial and Sustainability Officer at Aldar Properties, stated, “Our ability to consistently achieve a favorable 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.”
The issuance was facilitated by a consortium of leading financial institutions, including JP Morgan, Standard Chartered, 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. These partnerships played a crucial role in ensuring the success of the green sukuk issuance.
Aldar’s progress on sustainability has driven recent improvements in its ESG ratings. The company achieved an upgraded MSCI ESG rating to BBB and an enhanced score of 16.1 on Sustainalytics’ ESG risk assessment scale, indicating a lower level of ESG risk. Additionally, Aldar scored 60 points on the Dow Jones Sustainability Index (DJSI), reflecting its dedication to sustainable practices.
The green sukuk issuance aligns with Aldar’s broader sustainability goals and its plan to be a net-zero carbon business by 2050. The company has set science-aligned interim targets for 2030, aiming to achieve net-zero Scope 1 and Scope 2 emissions and deliver a 45% reduction in Scope 3 emissions.
Aldar Investment’s successful green sukuk issuance is a testament to its commitment to sustainable growth and financial resilience. By leveraging its Green Finance Framework and fostering investor confidence, Aldar continues to pave the way for a greener future in the real estate sector.
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