Dar Al Arkan's sukuk issue backed by lower interest rates: Chairman

Dar Al Arkan Real Estate Development Co.'s fixed rate Senior Unsecured Sukuk was driven by lower interest rates and decreased cost of funding, CNBC Arabia reported, citing Chairman Yousef Al Shelash.

"It has been a long time since the company secured loans," said Al Shelash.

The potential sukuk issue will likely help the company carry out its residential projects which require long-term funding, Al Shelash stated, adding that the issue size will be defined by end of the coming week, subject to interest rates.

"We are going to promote the issue in Saudi Arabia, UAE, GGC countries, Asia and Europe," he noted.

Saudi Arabia’s largest developer by assets is currently having three ongoing projects, including two in Riyadh and Jeddah and one in Dubai. It is set to launch new developments by 2020, as talks have reached an advanced stage. However, details about these projects will be revealed upon obtaining the necessary approvals, the Chairman added.

Al Shelash adopted an "optimistic" outlook for the real estate industry.

The real estate sector is expected to rally in Q4 2019 and Q1 2020, after several years of recession. Several amendments have been implemented and residential units are witnessing higher demand year-to-date across the Kingdom, Al Shelash explained, expecting the Kingdom to see higher demand in Q4 2019.

Dar Al Arkan said yesterday it planned to issue US$ fixed rate "RegS" Senior Unsecured Sukuk.