SRC, Black Rock to develop real estate finance market products
RIYADH, August 25, 2024
The Saudi Real Estate Refinance Company (SRC), a subsidiary of the Public Investment Fund, has signed a memorandum of understanding (MoU) with the US BlackRock conglomerate in New York City, to develop products in the real estate finance market in Saudi Arabia, and increase the share of businesses in the real estate sector capital markets.
The MoU was signed on the sidelines of the official visit of Saudi Minister of Municipalities and Housing, Majid bin Abdullah Al-Hogail, who is also SRC Board of Directors Chairman, said a Saudi Press Agency report.
The minister and his accompanying delegation are in the US to discuss ways to boost Saudi-American partnerships in the urban development, construction, building, finance and real estate development sectors.
The agreement was signed by SRC CEO Majid Fahd Al-Abduljabbar and General Manager of BlackRock in the Middle and CEO of BlackRock Saudi Arabia Yazeed Al-Mubarak. BlackRock President Robert Capito attended the signing ceremony.
The MoU aims to accelerate the development of products in the real estate refinancing market in Saudi Arabia, and expand through local and international capital market channels. It also seeks to diversify funding sources through fixed income markets, which is bound to increase the stability of the real estate finance market, and contribute to achieving the goals of the housing and financial sector development programmes, which serve as enablers of the kingdom’s Vision 2030.
Earlier, SRC signed an MoU with King Street Capital Management aiming to foster cooperation and strategic partnership between the two parties in the real-estate finance sector.
The MoU was signed by SRC Chief executive Majeed Fahd Al-Abdul Jabbar and King Street Managing Partner Brian J Higgins.
The MoU aims to diversify liquidity sources to support the secondary real-estate finance market's stability, foster economic growth, and attract more foreign investments to the Saudi market. This would contribute to achieving the housing programme targets outlined in the Kingdom’s Vision 2030. The memorandum also emphasises the development of innovative financial instruments, such as the securitisation of Sharia-compliant residential real-estate finance portfolios. SRC is working to adapt these instruments to meet the standards of specialized global investors.
Jabbar said the MoU with King Street is part of efforts to play a key supporting role in the housing system and the Financial Sector Development Program by providing the necessary liquidity in the real-estate finance market, diversifying financing options for the private sector, and creating a new asset class for investors. These efforts would contribute to achieving the housing program’s goal of increasing the homeownership rate among Saudi citizens to 70 per cent by 2030. Additionally, the agreement supports the growth and stability of the Saudi market while attracting both local and international investors.
