Dubai’s luxury real estate market continues to draw strong attention. Omniyat, a leading high-end developer, issued its first sukuk. The UAE sukuk market welcomed this debut with overwhelming investor interest. Omniyat increased the sukuk value from $400 million to $500 million due to high demand.
Investors placed orders worth $1.8 billion. This oversubscription allowed Omniyat to set a final profit rate of 8.375%. The UAE sukuk market responded well, even though the rate started higher. The pricing shows investor confidence in both Omniyat and Islamic debt instruments.
Despite strong demand, the sukuk traded around its issue price. This means there was no major price jump afterward. Analysts believe the pricing was accurate and left little room for short-term gains. In comparison, developers like Damac enjoy tighter yields due to their longer market presence.
Omniyat focuses on ultra-luxury real estate. It targets wealthy clients who are moving to Dubai. This segment offers resilience but also carries risk from a concentrated client base. The UAE sukuk market continues to support such specialized issuers.
The raised funds will go toward Omniyat’s growing pipeline of projects. The company plans to expand in a market that is still showing strength. Property sales and home prices in Dubai remain high. Issuing now allows Omniyat to benefit before any global slowdown or oil price dip.
Other developers like Sobha Realty and Azizi Developments may enter the market soon. By issuing early, Omniyat gets ahead of this wave. This helps it stand out in the UAE sukuk market before competition grows.
Investors, both Islamic and conventional, show high interest in sukuk. Real estate is a favorite asset in the region. Familiarity and long-standing value drive this preference. Asset managers now look beyond Emaar and Damac to newer firms like Binghatti and Sobha.
Developers prefer sukuk over bank loans for many reasons. Sukuk provide longer borrowing terms and more flexible conditions. Issuers also avoid tight restrictions found in traditional bank loans. This financial freedom is key, especially for those near their bank borrowing limits.
For major players like Emaar and Aldar, sukuk offer terms of up to ten years. Banks rarely provide loans for such long periods. As a result, many developers now favor the UAE sukuk market as a top funding source.
