SRC, Al-Rajhi Bank sign $1.54bn deal to boost residential real estate

Saudi Real Estate Refinancing Co. and Al-Rajhi Bank have entered into an agreement to expand the pool of new housing options for the Kingdom’s residents.

The deal involves the purchase of a real estate financing portfolio valued at SR5.8 billion ($1.54 billion).

The agreement is the fourth deal struck between SRC, which is fully owned by the Public Investment Fund, and Al-Rajhi Bank. It is the largest of its kind in Saudi Arabia’s banking sector, bringing the total value of agreements between the two entities to SR10.8 billion.

This collaboration is part of SRC’s commitment to bolstering the residential real estate market in the Kingdom and facilitating financial institutions in offering various solutions to citizens, the Saudi Press Agency reported.

Majeed Al-Abduljabbar, the CEO of SRC, said the deal aligned with the company’s strategy to establish enduring partnerships with leading financing entities, aiming to develop an active secondary market for residential real estate in the Kingdom.

Al-Abduljabbar noted that the agreement is pivotal in continuing to supply the local sector with necessary liquidity, which is crucial for the growth of the housing division in the Kingdom.

The agreement aims to provide flexible real estate financing solutions that meet the aspirations and requirements of citizens, aligning with the housing program goals of the Kingdom’s Vision 2030 to increase homeownership among Saudis.

SRC’s role involves providing solutions to support liquidity and manage balance sheet risks, thereby aiding agencies in expanding their presence in the real estate financing market.

The company was established in 2017 as part of the government initiatives under Vision 2030.

It plays a vital role in fostering the growth and sustainability of residential real estate financing in the Kingdom and is licensed by the Central Bank of Saudi Arabia to operate in the housing refinancing market.

By providing liquidity and supporting financing agencies, SRC aims to facilitate further growth in homeownership rates among Saudi citizens to reach 70 percent by 2030.