Binghatti Sukuk: Dubai Developer's Successful Debut in Debt Market #binghattisukuk

Binghatti, a prominent real estate developer based in Dubai, has made a significant foray into the debt sukuk market, marking its debut with resounding success. Subscriptions for the sukuk issuance reached an impressive $621 million, surpassing the initial $300 million target, as revealed by a recent statement.

The three-year sukuk issuance was priced competitively at 9.625% and experienced a tightening of approximately 30 basis points due to robust investor demand. The order book witnessed an oversubscription of 2.1 times, underscoring the strong investor appetite for Binghatti sukuk offerings.

Prior to the issuance, Binghatti engaged in international roadshows across Asia and the UK to connect with potential investors. The order book attracted interest from a diverse investor base, with notable contributions from the UK, Europe, and Asia.

This landmark deal represents the first real estate benchmark US dollar-denominated sukuk from the MENA region in 2024, positioning Binghatti as a trailblazer in the Islamic finance space.

Local banks, including Emirates NBD, Dubai Islamic Bank, HSBC, Abu Dhabi Islamic Bank, Sharjah Islamic Bank, Mashreq Bank, and RAKBank, played pivotal roles as joint lead managers (JLMs) and book runners for the sukuk issuance.

In January, Binghatti unveiled its third luxury branded residences project in collaboration with Mercedes-Benz, further diversifying its portfolio that already includes partnerships with Bugatti and Jacob & Co. The total value of this project amounts to an impressive $4.4 billion (AED 16 billion). Additionally, Binghatti's developments across mainstream and luxury segments represent an additional value of $2.1 billion (AED 7.6 billion).

CEO Muhammed BinGhatti shared insights into the company's expansion plans, highlighting investments totaling $272.3 million (AED 1 billion) in plot acquisitions across Dubai. Moreover, Binghatti has a pipeline of projects valued at $2.7 billion (AED 10 billion), with intentions to increase its investment value in the real estate market to $8.2 billion (AED 30 billion) over the next 12 months.

In February, Fitch Ratings assigned Binghatti Holding a credit rating of B+ with a positive outlook, reflecting confidence in the company's financial strength and growth prospects.

Looking ahead, investors and market observers await the UAE's plans to issue bonds and sukuk worth $1.4 billion (AED 5 billion) in the first quarter of 2024, signaling continued momentum in the region's debt capital markets. As Binghatti continues to innovate and expand its presence, its successful sukuk debut sets a precedent for future growth and development in the dynamic landscape of Islamic finance.

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