Aldar Investments Properties, a fully owned subsidiary of Abu Dhabi’s biggest-listed developer Aldar Properties, raised $500 million (Dh1.84 billion) through the sale of its debut Shairah-compliant bonds to refinance existing debt.
The seven-year fixed rate US dollar-denominated sukuk was more than twice oversubscribed by bond investors, Aldar said Wednesday in a bourse filing to Abu Dhabi Securities Exchange, where its shares are traded. The Islamic bonds offer a profit rate of 4.75 per cent, underpinned by Aldar Investments’ Baa1 credit rating, it said.
Combined with the Aldar group’s bank facilities, the sukuk deal extends the overall debt maturity beyond five years at an average interest rate of 3.9 per cent, a sign of the strength of Aldar's balance sheet.
“This successful sukuk issuance is a strong result for Aldar and validates the rationale for establishing Aldar Investments,” Greg Fewer, the company's chief financial officer, said. “We want Aldar Investments to be the most cost-effective platform for real estate ownership in the region and this transaction moves us significantly towards that goal.”
Earlier this month the company said it would spin off Dh20bn of revenue-generating assets into Aldar Investments, a new entity able to raise capital independently. About 5,000 residential units and 500,000 square metres of retail and commercial space will be transferred into the new vehicle over the coming weeks, along with Dh6bn of existing debt.
Before the new vehicle was established, Aldar comprised two parts – a real estate development business and an asset management business whose revenues came predominantly from residential and commercial rents.
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The new sukuk benefited from strong regional Islamic investors' demand as well as international institutional investors' interest, the company said.
Aldar on September 17 said that it is launching a tender offer for the repayment of an existing $750m sukuk, which is due to mature on December 3 this year.
Separately, Aldar said it also acquired the 40 per cent shares it did not own in Khidmah, giving it 100 per cent control of the integrated property services company.
The full ownership of the Khidmah will enable Aldar to better serve both direct and indirect customers through the integration of customer management between the developer and facility manager, it said in a statement to the bourse, without disclosing the value of the deal.
Khidmah provides a range of services to developers, landlords and corporate and government entities, including property management, facilities management, and consultancy.
“Aldar has long been committed to the ongoing success of this business, and this acquisition reinforces that commitment,” Talal Al Dhiyebi, chief executive of Aldar Properties, said. “From an Aldar perspective, customers have long viewed Khidmah as an extension of our brand and values, and this ensures that we now have complete control over that process.”