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Real Estate Developer Binghatti's Maiden Sukuk Gets Subscriptions Worth $621M, Doubles $300M Issue Size

Real Estate Developer Binghatti's Maiden Sukuk Gets Subscriptions Worth $621M, Doubles $300M Issue Size

Dubai-based real estate developer Binghatti made a debut in the debt sukuk market on Monday, with subscriptions reaching $621 million, well above the $300 million issue size, a statement showed.

Binghatti sukuk

The three-year sukuk issue was priced "competitively" at 9.625% and "experienced a tightening of approximately 30 basis points due to investor demand." The order book saw an oversubscription of 2.1 times, added the statement.

Before the issuance, Binghatti conducted international roadshows in Asia and the UK to engage with investors. The order book garnered interest from a diverse investor base, with significant contributions from the UK, Europe, and Asia.

The real estate developer launched the sukuk on February 22, according to Reuters.

Notably, this deal marked the first real estate benchmark US dollar-denominated sukuk from the MENA region in 2024.

Local banks, including Emirates NBD, Dubai Islamic Bank, HSBC, Abu Dhabi Islamic Bank, Sharjah Islamic Bank, Mashreq Bank, and RAKBank, served as joint lead managers (JLMs) and book runners on the deal.

Real estate projects

Binghatti unveiled in January its third luxury branded residences project in collaboration with Mercedes-Benz, adding to its previous partnerships with Bugatti and Jacob & Co. The total project value amounts to $4.4 billion (AED 16 billion).

The company also revealed that its developments in both mainstream and luxury segments represent an additional value of $2.1 billion (AED 7.6 billion), according to Zawya.

Crucial quote

“Over the past three months we already deployed more than $272.3 million (AED 1 billion) in plot acquisitions across Dubai in different areas like Business Bay, Jumeirah Village Circle,” said CEO Muhammed BinGhatti in an interview with Zawya in January.

“We have a pipeline of $2.7 billion (AED 10 billion) worth of additional projects to our existing investment portfolio which is $5.5 billion (AED 20 billion). Thus, we intend over the next 12 months to increase our investment value in the real estate market to $8.2 billion (AED 30 billion)."

Ratings

In February, Fitch Ratings assigned Binghatti Holding a B+ credit rating, with a positive outlook.

What to watch for

The UAE plans to issue bonds and sukuk worth $1.4 billion (AED 5 billion) in the first quarter of 2024, Younis Haji Al Khoori, Undersecretary of the Ministry of Finance, said last month.

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