Real Estate Developer, Sobha Realty, Launches $750 Million Green Sukuk, Largest in Sector for the Year 2025

Sobha Realty Issues Largest Green Sukuk by a Real Estate Developer

Sobha Realty, a leading real estate developer, has made history with the issuance of a $750 million Green Sukuk, the largest such issuance by a real estate developer globally in 2025. The five-year Islamic bond was issued under Sobha's $1.5 billion Trust Certificate Issuance Programme.

The Sukuk was priced at a profit rate of 7.125% per annum, with an effective yield of 7.375%. Due to high interest, the pricing tightened by 50 basis points from the initial guidance. The Sukuk was priced and allocated, attracting strong demand, with the order book for the issuance reaching approximately $2.1 billion-2.8 times the issue size.

A consortium of regional and international financial institutions, including Dubai Islamic Bank, Emirates NBD Capital, J.P. Morgan Securities, Mashreqbank, Standard Chartered Bank, Deutsche Bank, and Emirates NBD Capital, acted as Joint Global Coordinators. A broader group of 13 banks, including First Abu Dhabi Bank, Deutsche Bank, and Abu Dhabi Commercial Bank, served as Joint Lead Managers and Bookrunners.

The Sukuk was dual-listed on the London Stock Exchange and Nasdaq Dubai. Legal advisory was provided by Clifford Chance and Dentons, with Grant Thornton appointed as auditor. Deutsche Bank and Emirates NBD Capital also acted as Joint ESG Structuring Coordinators.

Regional investors took up 56% of the allocation, while 44% went to international participants. The issuance comes amid growing interest in sustainable finance instruments in the Middle East, as corporates align capital-raising efforts with environmental, social, and governance (ESG) goals.

Proceeds from the Sukuk will be used to finance or refinance projects that meet eligibility criteria outlined in Sobha Realty's Green Financing Framework. The Framework follows internationally recognized guidelines, including the International Capital Market Association (ICMA) Green Bond Principles and the Loan Market Association (LMA) Green Loan Principles. An independent Second Party Opinion was provided by DNV to confirm alignment with best market practices.

The issuance is expected to receive credit ratings of Ba2 (Stable) from Moody's and BB (Stable) from S&P, consistent with the ratings of the obligor, PNC Investments LLC. This issuance marks a significant milestone for Sobha Realty, involving key participants such as lead managers and advisors that typically include major banks and financial institutions experienced in Islamic finance.

Real Estate Developer, Sobha Realty, Launches $750 Million Green Sukuk, Largest in Sector for the Year 2025