Saudi mortgage refinancing firm to court foreign investors

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The Kingdom has announced plans to raise the rate of home ownership from 47 percent to 52 percent by 2020. (Reuters)
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Fabrice Susini
Updated 04 December 2017

Saudi mortgage refinancing firm to court foreign investors

LONDON: Saudi Arabia’s first mortgage-refinancing firm will actively court international investors to increase liquidity in the Kingdom’s housing market, said the CEO of the initiative.
The newly established Saudi Real Estate Refinance Company, which seeks to free up liquidity in the Kingdom’s mortgage market to promote homeownership, has already embarked on “soft discussions” with investors interested in the new market opportunity, CEO Fabrice Susini told Arab News.
“It’s not good enough simply to focus on the country and domestic investors. We want to have foreign investors interested in coming and investing into these loans or portfolios,” said Susini, who was picked to lead the state-run company, which officially launched in October.
With $1.3 billion in initial capital, the SRC will use a range of tools — from buying mortgage portfolios to issuing mortgage-backed securities — to incentivize lenders to give more loans to Saudi homebuyers.
According to Saudi officials, the demand for real estate financing is set to top SR500 billion ($133 billion) by 2026.
But Saudi citizens, particularly young people, have been hit in recent years by the double blow of a Kingdom-wide housing shortage and risk-averse banks wary of lending.
The Kingdom has announced plans to raise the rate of home ownership from 47 percent to 52 percent by 2020. By comparison, the US and UK both have home ownership rates above 60 percent.
Establishing the SRC, which expects to refinance up to $20 billion over the next five years, is part of an effort to remedy the nation’s low mortgage penetration rate, Susini said.
The SRC, which works under the auspices of the Ministry of Housing, will initially court investors closer to home.
“Our strategy is to go gradually, starting with the region, (with) countries which are close and knowledgable about the Saudi environment and the Shariah compliance,” Susini said. “As we will create credentials and history on the portfolios themselves … we will go after investors which are further away from the Kingdom or the region,” he said.
Secondary mortgages, which drew global attention during the financial crisis of 2008, are new to Saudi Arabia. According to reports, the Kingdom’s financial leaders have been working with American consultants to launch the enterprise for several years.
But Susini stressed that easing the mortgage process for average Saudi citizens is the SRC’s primary objective. “The SRC is really (meant) make sure that more people get access to home ownership,” he said. “The rest … the way we organize … all this is done in the kitchen. You are at the restaurant; we want people to have a good dish, at an affordable price. What happens in the kitchen, let’s leave it in the kitchen,” he said.
Asked when the company would officially launch operations and put the existing capital to work, Susini was circumspect. “Soon,” was all he revealed.
In an economy where cash is king and people are accustomed to paying upfront, new market realities will require new financing tools. “We need to explain why a reasonable amount of debt is advisable and will help fund your objectives,” Susini said.
Susini, who worked as a fixed income specialist at BNP Paribas for two decades, said that the SRC would help unlock capital across the entire real estate ecosystem. With more home loans available to buyers, building developers may be more keen to launch projects, he posited.
Broadening the country’s real estate sector is part of Crown Prince Mohammed bin Salman’s effort to wean Saudi Arabia off oil dependency and create modern financial markets more open to outside investment.

A Jordan startup delivers eco-friendly alternative to dry cleaning

Updated 05 December 2019

A Jordan startup delivers eco-friendly alternative to dry cleaning

  • Products used by WashyWash are non-carcinogenic and environmentally neutral
  • Amman-based laundry service aims to relocate to a larger facility in mid-2020

AMMAN: A persistent sinus problem prompted a Jordanian entrepreneur to launch an eco-friendly dry-cleaning service that could help end the widespread use of a dangerous chemical.

“Dry cleaning” is somewhat of a misnomer because it is not really dry. It is true that no water is involved in the process, but the main cleaning agent is perchloroethylene (PERC), a chemical that experts consider likely to cause cancer, as well as brain and nervous system damage.

Kamel Almani, 33, knew little of these dangers when he began suffering from sinus irritation while working as regional sales director at Eon Aligner, a medical equipment startup he co-founded.

The problem would disappear when he went on vacation, so he assumed it was stress related.

However, when Mazen Darwish, a chemical engineer, revealed he wanted to start an eco-laundry and warned about toxic chemicals used in conventional dry cleaning, Almani had an epiphany.

“He began to tell me how PERC affects the respiratory system, and I suddenly realized that it was the suits I wore for work — and which I would get dry cleaned — that were the cause of my sinus problems,” said Almani, co-founder of Amman-based WashyWash.

“That was the eureka moment. We immediately wanted to launch the business.”

WashyWash began operations in early 2018 with five staff, including the three co-founders: Almani, Darwish and Kayed Qunibi. The business now has 19 employees and became cash flow-positive in July this year.

“We’re very happy to achieve that in under two years,” Almani said.

The service uses EcoClean products that are certified as toxin-free, are biodegradable and cause no air, water or soil pollution.

Customers place orders through an app built in-house by the company’s technology team.

WashyWash collects customers’ dirty clothes, and cleans, irons and returns them. Services range from the standard wash-and-fold to specialized dry cleaning for garments and cleaning of carpets, curtains, duvets and leather goods.

“For wet cleaning, we use environmentally friendly detergents that are biodegradable, so the wastewater doesn’t contain any toxic chemicals,” Almani said.

For dry cleaning, WashyWash uses a modified hydrocarbon manufactured by Germany’s Seitz, whose product is non-carcinogenic and environmentally neutral.

A specialized company collects the waste and disposes of it safely.

The company has big ambitions, planning to expand its domestic operations and go international. Its Amman site can process about 1,000 items daily, but WashyWash will relocate to larger premises in mid-2020, which should treble its capacity.

“We’ve built a front-end app, a back-end system and a driver app along with a full facility management system. We plan to franchise that and have received interest from many countries,” Almani said.

“People visiting Amman used our service, loved it, and wanted an opportunity to launch in their countries.”

WashyWash has received financial backing from angel investors and is targeting major European cities initially.

“An eco-friendly, on-demand dry-cleaning app isn’t available worldwide, so good markets might be London, Paris or Frankfurt,” Almani said.


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