Qatari family business Almana Group said on Sunday it sold $163.4 million of UAE dirham-denominated Islamic bonds to help finance real estate projects in its home country.

The five-year floating-rate mudaraba sukuk, or Islamic bonds, were priced at 250 basis points above the three-month mirates Interbank Offered Rate (EIBOR), group chief financial controller P. Chatterji told Reuters from Doha.

Three-month Eibor is currently at 1.94 per cent. "It is basically for expansion and a major part will go into real estate projects, especially a tower in Qatar," Chatterji said.

Almana, which operates in sectors ranging from car dealerships to construction, will list the bonds on the Dubai International Financial Exchange, Chatterji said.

Gulf International Bank managed the sale. The sukuk are denominated in dirhams, highlighting investor appetite for Gulf Arab securities on speculation countries in the region may revalue their currencies - currently pegged to the falling US dollar - to stave off rising inflation.

Activity is on the rise with many companies planning issues or completing new issues, including mammoth chemicals firm Saudi Basic Industries Corporation and Dubai government-owned property firm Nakheel, which sold almost $1 billion of Islamic bonds in early May.

Ras al-Khaimah announced a sukuk programme earlier this month worth up to $2 billion, the first tranche of which is likely to be in dirhams.

Islam bans the receipt of interest, and sukuk returns are derived from underlying physical assets which typically pay a rent or profit to bondholders.-Reuters