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Sobha Realty has raised $750 million through the issuance of a green sukuk, marking the largest deal of its kind by a real estate developer globally. The transaction represents a major step in aligning Dubai’s booming property sector with sustainable finance practices that are gaining momentum across international markets.
The sukuk was launched under Sobha’s $1.5 billion Trust Certificate Issuance Program and will be listed on both Nasdaq Dubai and the London Stock Exchange. Investors showed overwhelming interest, with the order book climbing to nearly $2.1 billion, almost 2.8 times the offer size. That demand allowed pricing to tighten by 50 basis points compared with the initial guidance.
The instrument was priced at an annual profit rate of 7.125%, with an effective yield of 7.375%. Of the total allocation, 56% went to regional investors and 44% to international participants, underscoring a strong global appetite for Islamic sustainable finance products.
The proceeds will be channelled toward projects that comply with Sobha Realty’s Green Financing Framework, which was developed in line with the Green Bond Principles of the International Capital Market Association and the Green Loan Principles of the Loan Market Association. DNV provided a second-party opinion to confirm alignment with recognized global standards.
Ratings agencies have taken a cautious yet stable view. The sukuk is expected to carry credit ratings of BB (Stable) from S&P and Ba2 (Stable) from Moody’s, consistent with the ratings of the obligor, PNC Investments LLC. Analysts note that the stability outlook reflects both the strength of demand and the risks inherent in high-yield emerging market instruments.
The issuance drew participation from a consortium of major regional and international financial institutions. Standard Chartered Bank, Mashreqbank, J.P. Morgan Securities, Dubai Islamic Bank, and Emirates NBD Capital acted as joint global coordinators. They were joined by First Abu Dhabi Bank, Deutsche Bank, Abu Dhabi Commercial Bank, and several others as joint lead managers and bookrunners. Deutsche Bank and Emirates NBD Capital also served as co-coordinators for ESG structuring, while Clifford Chance and Dentons provided legal advice. Grant Thornton was appointed as the auditor.
Market observers say the success of the Sobha Realty $750 million green sukuk is part of a broader trend. In the past two years, Gulf issuers have increasingly turned to green and sustainable instruments to attract capital, reflecting both investor demand and government efforts to advance environmental goals. Saudi Arabia and the UAE have committed to net-zero strategies, and financial markets are adapting accordingly.
Real estate developers are among the most active players in this space, as they seek funding for projects that incorporate renewable energy, water efficiency, and environmentally friendly construction. By tapping global markets through a green sukuk, Sobha is not only raising funds but also sending a signal that sustainable development is becoming a mainstream expectation in Dubai’s real estate landscape.
Executives at Sobha emphasized that the proceeds will be directed into developments that meet clear environmental standards. These include energy-efficient residential communities, green-certified buildings, and infrastructure designed to minimize environmental impact. Such projects are seen as vital for maintaining Dubai’s appeal to both investors and end users at a time when sustainability is influencing real estate decisions worldwide.
The timing is also notable. The issuance coincides with rising interest rates, which have pushed borrowing costs higher across global markets. Securing demand at this scale suggests that sustainable finance products continue to command significant investor confidence even under tighter financial conditions.
For Dubai, the listing of the sukuk on its exchange strengthens the city’s role as a regional hub for Islamic finance and sustainable investment. Nasdaq Dubai has positioned itself as a platform for green sukuk, hosting issuances from sovereigns, banks, and corporations. Sobha’s entry adds further weight to this reputation.
Industry analysts argue that the Sobha Realty $750 million green sukuk could encourage other developers in the Gulf to pursue similar funding routes. As competition for environmentally conscious investors grows, aligning with frameworks that meet international ESG benchmarks is likely to become the norm rather than an exception.
The broader message is that the property sector is undergoing a shift. Where once Dubai was primarily associated with luxury towers and speculative investment, initiatives like this suggest an evolution toward sustainability-driven finance. For investors, that combination of high yield and green credentials is proving hard to ignore.
It is a five-year Islamic bond issued under Sobha’s $1.5 billion program to finance sustainable real estate projects.
The order book reached nearly $2.1 billion, oversubscribed by 2.8 times the issuance size.
It is listed on Nasdaq Dubai and the London Stock Exchange, enhancing international visibility.
They will finance or refinance projects that meet Sobha’s Green Financing Framework, aligned with ICMA and LMA principles.
It signals a shift toward sustainable finance in property development, aligning with global ESG standards.
