Saudi Arabia plans to issue real estate sukuk worth up to 150 billion Saudi riyals ($40 billion) by 2030, Arabic daily Al-Ekhtisadiya reported.
The report cited Saudi Minister of Municipalities and Housing Majid Al-Khogeir at the World Urban Forum (WUF) in Azerbaijan this week as saying that the kingdom will wait for the geopolitical situation to stabilize before it begins issuing annual real estate sukuk of about 20 billion riyals ($5.3 billion) this year.
Gulf countries are looking to real estate bond issuance to ease the funding burden on their banking sectors, which are already facing liquidity pressures as they finance mega-projects under Vision 2030.
Last year, the Saudi Real Estate Refinance Company (SREC), owned by the Public Investment Fund, listed a $5 billion international sukuk program on the London Stock Exchange. According to a statement posted on the sovereign wealth fund’s website, SRC has already issued $2 billion in sukuk through the program, with demand six times greater than the amount offered.
Al-Khogeir said Saudi Arabia had completed a series of measures aimed at regulating the real estate market, after introducing a fee for undeveloped “white land” and last week approving administrative regulations governing fees for vacant properties.
(Written by P Deol, Edited by Anoop Menon)
(anoop.menon@lseg.com)
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