The real estate booms in Dubai and Abu Dhabi have propelled the United Arab Emirates’ sukuks to lead the global Islamic bond market since the inauguration of former US President Donald Trump, according to Bloomberg data.
Since January 20, the UAE’s Islamic securities have delivered an average return of 2.5%, surpassing the US to become the top-performing sukuk market worldwide. This surge is largely driven by Emaar Properties PJSC and Aldar Properties PJSC, whose sukuks are among the best performers.
UAE: A Safe Haven for Global Investors
Amid global uncertainties such as trade tariffs, geopolitical conflicts, and economic slowdowns, the UAE has emerged as a safe-haven for international investors. Asset management firms like Cheyne Capital and Ninety One Plc have made Dubai and Abu Dhabi key holdings in their portfolios.
At the center of this investment boom is the expat-driven growth in the Dubai and Abu Dhabi real estate markets. House prices in Dubai increased by 17.5%, while Abu Dhabi saw a 12.3% rise over the past year, according to real estate data provider Reidin.
High rental yields and government-backed developers are giving investors confidence, even as property market growth stabilizes from earlier highs.
The global sukuk index is also on track for its third consecutive monthly gain, marking its second-best start to a year on record.
Emaar’s Sukuk Surges Amid Record Sales
Emaar Properties’ sukuk maturing in 2029 is trading near its highest level since November 5, driven by better-than-expected financial results and a credit-rating upgrade from S&P Global.
“Emaar is a prime beneficiary of the Dubai real estate boom owing to its market leadership,” said Fady Gendy, a fixed-income manager at Arqaam Capital. “The rally in Emaar’s sukuk is supported by record sales and robust liquidity.”
In 2023, Emaar Development PJSC reported a 75% increase in property sales, reaching 65.4 billion dirhams ($17.8 billion), while its backlog rose 59% to 91 billion dirhams, ensuring future revenue.
Neither Emaar nor Aldar responded to requests for comment.
Aldar’s Green Sukuk Attracts Strong Demand
Aldar Properties, a leading Abu Dhabi developer, has also capitalized on the property boom. The company’s 2024 EBITDA surged 51%, with 78% of sales now coming from overseas and expat customers—a significant rise from less than 20% before the UAE’s Golden Visa program.
In March 2024, Aldar issued a $500 million 10-year green sukuk, which was six times oversubscribed, reflecting strong investor confidence. Its 2033 and 2034 sukuks have yielded returns of over 3% since January 20.
“Aldar’s leadership in Abu Dhabi and strong ownership structure make it a compelling investment,” Gendy added. “The company is projecting a doubling of EBITDA over the next three years.”
The ongoing demand for UAE sukuks underscores the country’s resilience and appeal as a global investment hub amid volatile international markets.
