The UAE’s sukuk market achieved a historic milestone in 2025, with issuance reaching a record $20 billion, reflecting the country’s strong financial fundamentals, supportive regulatory environment, and rising global demand for Islamic financial instruments. This achievement highlights the UAE’s growing leadership in Islamic finance and its role as a key hub for Shariah-compliant capital markets.
One of the main drivers behind this record issuance is the UAE’s proactive policy framework, which encourages diversification of funding sources and promotes Islamic finance alongside conventional markets. Government initiatives, clear regulatory guidelines, and strong oversight have enhanced market confidence, making sukuk an attractive option for sovereign, quasi-sovereign, and corporate issuers. These measures have ensured transparency, stability, and alignment with international best practices.
Market growth has also been supported by the UAE’s robust economic performance and ongoing investment in infrastructure, energy transition, real estate, and development projects. Sukuk instruments have proven to be an efficient and flexible financing tool for funding large-scale initiatives while aligning with ethical and Shariah-compliant principles. This has expanded the issuer base and increased the depth and liquidity of the local sukuk market.
Investor preference has played a crucial role in driving demand. Sukuk are increasingly favored by both regional and international investors due to their relatively stable returns, asset-backed structures, and alignment with sustainable and ethical investment strategies. The growing integration of environmental, social, and governance (ESG) principles with Islamic finance has further strengthened the appeal of sukuk, particularly among long-term institutional investors.
The strong performance of the UAE sukuk market mirrors broader global trends. International sukuk markets have also experienced significant expansion, supported by rising demand from Islamic and non-Islamic investors seeking portfolio diversification and resilient investment options. This global growth has reinforced the UAE’s position as a gateway connecting regional issuers with international capital.
In addition, technological innovation and financial market sophistication have enhanced issuance efficiency and investor access. Digital platforms, improved settlement systems, and cross-border listings have contributed to smoother transactions and wider market participation.
Overall, the record $20 billion sukuk issuance in 2025 underscores the UAE’s strategic vision for financial sector development. By combining supportive policies, strong economic fundamentals, and investor confidence, the UAE continues to strengthen its leadership in global Islamic finance while contributing to the sustained growth of sukuk markets worldwide.
