PC: PR Newswire
PNC Investments, the parent company of Dubai-based luxury real estate developer Sobha Realty, is looking into the possibility of issuing new sukuk, once the current sukuk matures in 2028, rather than going in for existing sukuk. That was revealed by one of its senior executives in keeping a strategic approach while adopting financial decision-making for the next generation. The statement further signalizes a calculated approach on the company to arrive at a long-term financial identity while planning for future expansion to maintain their status within demographic goals. With this possible alteration of the strategy, the company indicates its willingness to play a central role in adapting to market trends and aligning the financing approach to its expansionary plans.
Nikunj Patel, Chief Financial Officer of Sobha Realty, made this submission during a recent global investor call. “We are sitting on the $500 million level. And if we have to, fundraise, it will be a new issuance, and not the tap,” Patel revealed.
In September last year, Sobha Realty implemented casual changes in its existing sukuk structures. It had planned to reduce the sukuk originally issued for $300 million by $30 million so that the new sukuk would total $270 million. The realised tap issuance thereafter had added $230 million to the overall sukuk size of a benchmark $500 million. This is an exercise in seeking further strategy on financing the company in terms of monetizing the financing flotations and an indication of how flexible they want to be in the constant evolution of the whole process.
However, in spite of all that is going on right now through fundraising, Patel said that he is not going for further sukuk or eurobonds for now. However, he said, Sobha Realty is keeping a close eye on the financial market conditions so that it can make considered judgments. “As we identify land bank opportunities, we may look at raising debt depending on the situation,” Patel said, indicating the great leeway the company has to alter its financial stance based on market developments.
Sobha Realty now has a very positive financial outlook, underpinned by very large real estate developments. The company aims to deliver a total of 3,000 residential units in 2025 and ramp this figure up to 6,000 units in 2026. This acceleration in project deliveries is expected to translate into a significant pickup in cash collections and further bolster the company’s liquidity position so that it remains in a financially strong, cash-rich position to fund its future expansion and development activities.
