Sobha Realty Issues $750 Million Green Sukuk to Finance Sobha One Dubai
Sobha Realty Raises $750 Million Through Inaugural Green Sukuk
Sobha Realty announced the successful issuance of its inaugural USD 750 million Green Sukuk, a landmark transaction that is the largest in the Company's history and the largest Green Sukuk by a real estate developer globally in 2025.
Record Investor Demand and Pricing
The order book for this 5-year Green Sukuk, maturing in 2030, was significantly oversubscribed, reaching approximately USD 2.1 billion, 2.8 times the issuance size, reflecting strong investor confidence in Sobha Realty's credit profile and sustainability strategy. Robust demand from a high-quality investor base, with 56% allocated to regional investors and 44% to international investors, enabled a substantial price tightening of 50 basis points from Initial Price Thoughts.
Sobha Realty fixed the Sukuk at a profit rate of 7.125% with an effective yield of 7.375%. The Sukuk will be listed on the London Stock Exchange and Nasdaq Dubai.
Green Financing Framework and Capital Allocation
The net proceeds from this Green Sukuk will be allocated to financing or refinancing eligible green projects as defined in Sobha Realty's Green Financing Framework, which is aligned with the International Capital Market Association (ICMA) Green Bond Principles and the Loan Market Association (LMA) Green Loan Principles, and received an independent Second Party Opinion (SPO) from DNV confirming its alignment with market best practices.
The Sukuk was launched under a USD 1.5 billion Trust Certificate Issuance Programme.
Developer's ESG Commitment
Mr. Ravi Menon, Chairman of Sobha Group, commented: "The resounding success of our inaugural Green Sukuk issuance is a powerful testament to the market's recognition of Sobha Realty's robust financial standing and our deep, unwavering commitment to sustainable development. This transaction is not just a financing initiative; it is a strategic alignment of our capital structure with our core values."
The Sukuk issuance is expected to be rated Ba2 (Stable) by Moody's and BB (Stable) by S&P, in line with the corporate credit rating of the obligor, PNC Investments LLC.
Syndication and Financial Advisory
Sobha Realty signed up Dubai Islamic Bank, Emirates NBD Capital, JP Morgan Securities, Mashreqbank and Standard Chartered Bank as joint global co-ordinators and Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Ajman Bank, Arab Banking Corporation, Arqaam Capital, Deutsche Bank, First Abu Dhabi Bank, The National Bank of Ras Al Khaimah, Sharjah Islamic Bank and Warba Bank as joint lead managers and joint bookrunners. Deutsche Bank and Emirates NBD Capital were appointed as joint ESG structuring co-ordinators.
About Sobha Realty
Established in 1976 as an interior decoration firm in Oman by PNC Menon, the company has grown its presence with developments and investments in the UAE, Oman, and India. For nearly five decades, Sobha Realty has been redefining the real estate value chain through 'Backward Integration' by leveraging its inherent in-house capabilities of conceptualization, design, and development.
With a proven track record of delivering projects ahead of schedule, the company has thirteen masterplans across the UAE and is continually expanding its presence in the city with a number of other prominent projects.
Market Context
The transaction comes amid a flurry of activity in the UAE's property-linked sukuk market, which has increasingly become a magnet for global capital. Just months earlier, Aldar Investment Properties successfully priced a $500 million green sukuk with a 10-year tenor that drew an extraordinary $3.6 billion in orders, oversubscribed more than seven times. Similarly, Damac Real Estate Development raised $750 million through a sukuk earlier in 2025, attracting over $2.3 billion in demand and pricing at 7 per cent. Market experts said the surge in demand for these instruments also speaks to the UAE's growing role as a hub for sustainable Islamic finance.