The third-largest Gulf Arab real-estate developer by market value, Aldar Properties, recently announced that it intended to borrow as much as $4 billion to fund various development projects throughout the United Arab Emirates as well as abroad.
“If you look at the scale of our projects, they require substantial funds,” said Shafqat Malik, Aldar’s Chief Financial Officer, according to Reuters.
“In the next three years we are looking to put together 3 to 4 billion dollars in financing,” Malik added, saying that the firm expected to sell its first Islamic bonds early next year.
Aldar is currently developing 70 billion dirhams ($19.06 billion) worth of projects in Abu Dhabi. The firm had raised 1.5 billion dirhams in an initial public offering in 2005, and had borrowed 1.4 billion dirhams earlier this year from a group of banks including Britain’s Barclays Plc.
“There’s a lot of liquidity, especially in Islamic finance,” added Malik, who said that Aldar would list its first Islamic bond on the Abu Dhabi stock exchange. Unlike conventional bonds, Islamic bonds are typically backed by assets that generate income from which the borrower pays the lender profit instead of interest, which is prohibited on Islamic transactions.
