Dubai real estate firms explore Islamic bonds amid boom
Although prices have already begun to cool in recent months, developers say buyer appetite remains strong for now
[ABU DHABI] Two Dubai-based real estate firms are preparing to tap Islamic debt markets, aiming to capitalise on strong demand for property in the city.
Sobha Realty has been gauging investor interest in the United Arab Emirates and London ahead of a potential dollar-denominated sukuk, according to people familiar with the matter. The firm will likely use proceeds to buy land in Dubai, the people said, requesting anonymity to discuss confidential information.
Luxury developer Omniyat is also considering a debut dollar sukuk as early as this quarter to fund upcoming projects, some of the people said.
No final decisions have been made on the timing or size of either transaction, though firms typically look to raise several hundred million dollars from such deals.
Representatives for Sobha did not respond to requests for comment. A spokesperson for Omniyat said the firm continuously evaluates strategic opportunities aligned with its long-term vision.
The firms are weighing issuances at a time when US President Donald Trump’s sweeping tariffs have rattled global markets.
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Sukuks of UAE-based developers posted a world-beating rally earlier this year, but that momentum has faded. Yields on Sobha’s 2028 sukuk also spiked earlier this month.
Dubai’s property boom – which has driven a 70 per cent surge in prices over the past four years – also faces growing headwinds. Analysts warn that US trade policy and falling oil prices could weigh on demand.
Prices have already begun to cool in recent months. Still, developers say buyer appetite remains strong for now, with available inventory continuing to sell quickly.
Sobha ranked as Dubai’s third-largest real estate developer in the 2024 financial year, with 21 billion dirhams (S$7.57 billion) in property sales, according to its investor presentation.
Omniyat, which specialises in the city’s ultra-luxury segment, reported 2.94 billion dirhams in sales last year. The company previously secured a US$100 million loan from Nomura Holdings for one of its projects in Dubai, Bloomberg News reported in January.
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