Emaar hires banks for sukuk deal

The developer will meet investors in Singapore, Hong Kong and London starting September 6

Emaar Development reported 1 per cent increase in its third quarter profit. Christopher Pike/Bloomberg

Emaar Properties said on Tuesday that it has engaged a group of local and international banks to market a 10-year dollar sukuk, its first foray into the Islamic bond market since 2016.

The Dubai-based property developer appointed Standard Chartered bank as the sole global coordinator for the deal, with Dubai Islamic Bank as its Sharia adviser, the company said in a statement to Dubai Financial Market, where its shares trade.

Other banks leading the transaction include Deutsche Bank, Emirates NBD Capital, First Abu Dhabi Bank, Mashreq Bank and Sharjah Islamic Bank.

Emaar will meet investors in Singapore, Hong Kong and London starting on September 6 as it seeks to take advantage of favourable debt market conditions. Emaar’s sukuk is part of its $2 billion (Dh7.34bn) trust certificate issuance programme. In July, the company announced that it had repaid $500 million of certificates issued under the same programme.

Emaar may issue a benchmark size sukuk to refinance existing debt at lower rates, according to Bloomberg. Emaar last sold Islamic bonds in 2016 when it raised $750m from the sale of 10-year notes.

In the first half of 2019, Emaar's revenue and its net profit attributable to shareholders declined by about 4 per cent, to Dh11.57bn and Dh3.1bn, respectively. Property sales were up 52 per cent to Dh9.4bn.

Accounts filed last month revealed it had completed its buy-out of development management company Mirage Leisure and Development, taking the remaining 35 per cent of the business it did not already own, for Dh66.5m.

In July, the company also revealed plans to develop 10 per cent of the total land area of Beijing's new Daxing International Airport with residential and leisure facilities, a project worth Dh40.5bn. The project is expected to be completed over a 10-year period.

Sukuk issuance is set to rise 6 per cent to $130bn this year, a fourth consecutive annual increase, driven by strong activity in Saudi Arabia and Malaysia, Moody's Investors Service said in a recent report.