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 main index dips slightly to 10,912
RIYADH: Saudi Arabia’s Tadawul All Share Index was broadly stable on Tuesday, as it shed just 4.61 points or 0.04 percent to close at 10,912.43.
The total trading turnover of the benchmark index stood at SR3.99 billion ($1.06 billion), with 68 of the listed stocks advancing, and 194 declining.
The Kingdom’s parallel market Nomu gained 0.68 points to close at 23,358.18.
The MSCI Tadawul Index also edged up by 0.03 points to 1,467.56.
The best-performing stock on the main market was Saudi Cable Co. The firm’s share price rose by 9.72 percent to SR161.40.
The share price of Almasane Alkobra Mining Co. advanced by 9.25 percent to SR108.70.
Al-Jouf Agricultural Development Co. also saw its stock price climb by 6.46 percent to SR48.10.
Conversely, the share price of Tabuk Agricultural Development Co. edged down by 3.67 percent to SR7.61.
On the announcements front, Dar Al Majed Real Estate Co. said that it signed a Shariah-compliant banking facilities agreement with the Arab National Bank valued at SR500 million.
In a Tadawul statement, the company revealed that the agreement is aimed at supporting the firm’s expansion plans and financing its future projects in line with its approved strategic plan.
The financing term extends for up to five years and includes a grace period of two years.
The share price of Dar Al Majed Real Estate Co. declined by 0.99 percent to SR9.
Saudi Paper Manufacturing Co. said it signed a credit facilities agreement with Kuwait Finance House Bahrain, which includes facilities allocated to finance working capital and medium-term facilities amounting to $40 million.
In a Tadawul statement, the company revealed that the working capital facilities extend for 12 months and are renewable.
The medium-term facilities last for 48 months, including a six-month grace period.
The credit facilities will be used to cover the company’s working capital for operational activities, plans and expansions in purchasing raw materials, in addition to restructuring medium-term debts to improve cash flows.
The share price of Saudi Paper Manufacturing Co. edged down by 1.09 percent to SR58.80.
