Real estate in Saudi Arabia now constitutes a third of the Kingdom’s total assets under management, according to the chairman of the Capital Market Authority (CMA).
At the Real Estate Future Forum in Riyadh, Mohammed bin Abdullah El-Kuwaiz reported that the sector’s value had reached SR170 billion ($45.3 billion) by the end of the third quarter of 2023.
El-Kuwaiz highlighted the significant potential within the industry, achievable through various financing methods available in the capital market. These include offering and listing opportunities, as well as leveraging the debt market for expansion.
He clarified that while some perceive real estate financing through the market as limited to offerings and capital increases, these only represent less than 10 percent of the market’s financing. The majority of financing, he noted, comes from real estate funds.
This growth underscores the increasing importance of real estate financing through the Kingdom’s financial market.
A KPMG report from October 2023 identified real estate as the primary alternative investment in Saudi Arabia, offering opportunities for retail investors to participate in the Kingdom’s burgeoning property market. The report noted that real estate investment trusts (REITs) have gained popularity, with the number of public and private investment fund subscribers being highest in the real estate sector.
The report further detailed that the number of real estate funds had grown significantly, from 204 in June 2022 to 337 by June 2023.
During the forum, El-Kuwaiz emphasized that REITs are among the various real estate products available, including income, development, and closed-end traded funds distributed through fund platforms.
He also stressed the substantial financing needs required to turn ambitions in the real estate sector into reality, particularly in light of housing programs, ownership plans, and other major projects.
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By Proptechbuzz
By Ravi Kumar