LONDON: The Saudi Real Estate Refinance Company (SRC) has signed an agreement with Bidaya Home Finance to purchase a portfolio and provide a mortgage refinancing facility totaling SR1 billion (£266 million).
It marks the second refinancing deal that SRC, which is owned by Saudi Arabia’s Public Investment Fund, has signed in two weeks.
SRC, which was established in October, seeks to free up liquidity in the Kingdom’s mortgage market to promote home ownership.
It acquires, aggregates, and packages portfolios of financing into mortgage-backed securities to sell to domestic and international investors.
The aim is for these transactions to provide lenders with liquidity that will help grow and sustain the real estate financing market.
Saudi Housing Minister Majed Al-Hogail said the SRC deal, announced in a statement issued Wednesday, will help Bidaya offer more accessible home financing and increase home ownership among citizens.
“This agreement is another step in improving the quality of life of our citizens through housing,” he said.
Mazin Al-Ghunaim, CEO of Bidaya, said: “The partnership with SRC will help us expand the range of home finance products and services for our clients, thereby ensuring a more sustainable and robust customer experience.”
Fabrice Susini, SRC’s chief executive, said the company had started increasing the funding available to financial institutions “so they can increase the availability and accessibility of mortgage financing” to Saudi citizens.
“We want to make it possible for the average Saudi to obtain financing so they can own their own home,” he said.
Susini told Arab News earlier this month that the company will actively court international investors to increase liquidity in the Saudi housing market.
SRC has already embarked on “soft discussions” with investors interested in the new market opportunity, he said at the time.
According to Saudi officials, the demand for real estate financing is set to top SR500 billion ($133 billion) by 2026.
But citizens, particularly young people, have been hit in recent years by a Kingdom-wide housing shortage and risk-averse banks wary of lending.
The country has announced plans to raise the rate of home ownership from 47 percent to 52 percent by 2020.
Saudi Real Estate Refinance Company inks SR1bn deal
Saudi Real Estate Refinance Company inks SR1bn deal
Closing Bell: Saudi Arabia’s main index closes in red at 10,364
RIYADH: Saudi Arabia’s Tadawul All Share Index closed lower on Sunday, shedding 185.05 points, or 1.75 percent, to end the session at 10,364.03.
Total trading turnover on the benchmark index stood at SR2.55 billion ($680 million), with 20 stocks advancing and 237 declining.
The Kingdom’s parallel market Nomu also retreated, falling 0.63 percent, or 147.19 points, to close at 23,371.82.
The MSCI Tadawul Index slipped 1.71 percent to 1,369.56.
Saudi Industrial Export Co. was the top gainer on the main market, with its share price jumping 9.87 percent to SR2.56.
Shares of Naqi Water Co. rose 2.53 percent to SR58.80, while Shatirah House Restaurant Co. advanced 2.18 percent to SR9.39.
On the downside, Gulf Union Alahlia Cooperative Insurance Co. posted the steepest decline, with its share price falling 4.61 percent to SR10.14.
On the announcements front, Scientific & Medical Equipment House Co. said it had been awarded a contract valued at SR260.98 million by the Ministry of Human Resources and Social Development to supply uncooked food materials and catering items to beneficiaries at the ministry’s residential branches across the Kingdom.
The project scope also includes providing cooked meals to selected anti-begging offices over a 24-month period, according to a Tadawul statement. The company added that the financial impact of the contract will begin in the fourth quarter of this year.
It said further developments would be disclosed in due course after all relevant parties sign the final contract and a copy is received.
Shares of Scientific & Medical Equipment House Co. edged up 0.31 percent to SR32.44.
Separately, Dr. Soliman Abdel Kader Fakeeh Hospital Co. and its subsidiaries signed an agreement with Oloof Development Co., a wholly owned subsidiary of Jazan Municipality, to lease a strategic land plot in Jazan City for SR217.99 million.
According to a Tadawul statement, the land, which spans 34,581 sq. meters, will be used to develop an integrated healthcare facility under a 50-year lease.
The company said the financial impact of the agreement is expected to begin once the medical facility is completed and becomes operational.
Shares of Dr. Soliman Abdel Kader Fakeeh Hospital Co. fell 1.92 percent to SR33.74.
