Dubai: The world’s tallest office tower in the United Arab Emirates will be financed with Islamic debt as the Arabian Gulf business hub steps up sukuk sales amid plans to create a global center for the industry.
Dubai Multi Commodities Centre (DMCC) will draw on a mix of funding, including Shariah-compliant bonds (Sukuk), to pay for the skyscraper, which will stand at least 520 meters tall and cost about $1 billion, DMCC Chairman Ahmed bin Sulayem said in an interview on July 24.
He said in the interview, “When we go with something, we would like it to be Islamic.” Dubai had said in January that it wants to make Islamic finance a “core industry” amid forecasts by Standard & Poor’s that global Islamic assets will double to as much as $3 trillion by 2015. Sukuk sales by Dubai issuers including the state utility and Emirates airline, accounted for 35 percent of total offerings in the Gulf Cooperation Council (GCC) this year, up from 26 percent in the same period in 2012, data compiled by Bloomberg show.
The UAE’s borrowing costs dropped two times more than the global average for sovereign sukuk since reaching a record on June 26. The commercial skyscraper will join Dubai’s skyline in about five years, according to bin Sulayem. Dubai is already home to the Burj Khalifa, the tallest mixed-use tower in the world at a height of 828 meters.