(MENAFN- Emirates News Agency (WAM))
RIYADH, 19th October, 2017 (WAM) -- The Saudi Public Investment Fund, PIF, has announced the establishment of the Saudi Real Estate Refinance Company, SRC, in line with the Saudi Vision 2030 objectives to improve the performance of the real estate market, increase its contribution to the GDP, and raise the rate of homeownership among Saudis to 52 percent by the end of 2020.
The demand for real estate financing in the Kingdom is expected to increase from SAR280 billion in 2017 to SAR500 billion in 2026, according to the Saudi Press Agency.
Launched in partnership with the Ministry of Housing, and under the chairmanship of the Minister of Housing, Majed al-Hogail, the new company is designed to stimulate housing sector development in the kingdom by injecting liquidity into the real estate market. The SRC is anticipated to refinance up to SAR75 billion for the kingdom's housing sector over the next five years, reaching SAR170 billion by 2026.
The company will act as an intermediary access point for investors, aligning the liquidity, capital, and risk management requirements of real estate mortgage companies, with risk acceptability and return on equity to meet investor targets.
It endeavours to create stability and growth in the housing sector by injecting liquidity into the secondary mortgage market, improving standards, and facilitating access to local and international financing sources.
The SRC will adopt a strategy of acquiring mortgage funds to increase financial capabilities and broaden the activities of real estate financing companies. It will also work on linking the investment capital of foreign and local investors with the range of opportunities available in the growing housing market.
In addition, the company's activities will include issuing bonds as securities, supported through real estate mortgage contracts over the short- and the long-term, to real estate financing companies.
The SRC is considered a leading new initiative for the kingdom's housing sector, launched in line with the highest international standards. It has been granted a licence to undertake real estate refinancing activities by the Saudi Arabian Monetary Authority, SAMA.
WAM/Hazem Hussein/Hatem Mohamed
MENAFN1910201700610000ID1095967426
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