SmartCrowd Holdings, a regional pioneer in fractional real estate investments, has been granted a FinTech experimental permit by the Saudi Capital Markets Authority (CMA). SmartCrowd is currently working on completing business requirements for the upcoming launch of its Real Estate Funds Distribution Platform, making alternative assets accessible to the general public within Saudi Arabia soon.
Saudi Arabia's residential real estate market is an immense untapped sector offering an excellent opportunity for regional and global investors, with forecasted market growth (CAGR) of more than 9.74% between 2022 - 2027.
Valued at SAR 156bn in 2021 (Source: Knight Frank), the real estate market is expected to grow significantly, in line with the country's Vision 2030, the rapid pace of new developments, and the Kingdom's ongoing efforts to diversify its economy away from reliance on oil and gas revenues.
Abdullah A. Al Othaim, CEO of Mad'a Investment, a Saudi-based firm and lead investor in SmartCrowd's latest bridge round, said: "SmartCrowd's expansion into Saudi Arabia provides an ideal opportunity for locals to diversify their portfolio and global investors to take advantage of the thriving Saudi real estate market.
"The current global markets are facing major challenges. SmartCrowd provides an opportunity to diversify against uncertainty since the real estate market is the most favorable due to its simplicity and lower volatility."
Yousef Albabtain, a Principal at Shorooq Partners, the UAE-based venture capital firm and early-stage investors in SmartCrowd, said: "We are proud to be part of SmartCrowd's journey as the region's first and most prominent real estate crowdfunding platform. The world-class experience SmartCrowd built has empowered thousands of investors to diversify their portfolios and generate compelling returns.
"We believe the recent expansion into the Kingdom of Saudi Arabia represents a key milestone by the team to unlock the enormous potential in the largest MENA market. We are confident that SmartCrowd will play a vital role with all Saudi regulators and stakeholders to deliver greater financial prosperity to more individuals."
Currently headquartered in Abu Dhabi as part of Hub71's tech ecosystem, SmartCrowd's expansion into Saudi Arabia aligns with its mission of making real estate investing more accessible to the masses by enabling individuals to invest in income-generating properties collectively.
Since its inception, the platform has funded over 75 properties worth over AED65M, distributed over AED 3.2M in rental income, and recently exited an investment property with a total return of 39.25%, demonstrating a complete investment cycle. SmartCrowd is also one of the few wealth-tech platforms in the region that has generated tangible returns to its investors, making the product appealing to its users, as evidenced by its 65% re-investment rate.
SmartCrowd CEO and Co-Founder Siddiq Farid said: "With the newly granted Saudi permit, SmartCrowd has solidified its position as a major regional player. In line with increasing demand and investor appetite for diversified real estate opportunities, SmartCrowd will continue to introduce innovative products and enter new regional markets."
SmartCrowd's platform users are 80 percent UAE-based. The remaining 20 percent come from all over the world, even as far as New Zealand and Australia, and are using SmartCrowd to build a diversified real estate portfolio.
Having witnessed double-digit growth in both AUM and investors over the last two quarters, SmartCrowd will be raising fresh capital to finance its regional expansion.
The SmartCrowd mobile application, now available on iOS App Store and Google Play, makes real estate investments even simpler and more accessible.
The Saudi government's focus on the real estate sector, as a part of the diversification process of the economy, is anticipated to boost the domestic residential market in the coming years.
Saudi Arabia's population is dominated by young middle-class people who are first-time home renters and buyers. Some 45% of the country's population is below 20 years old.
As such, there is a significant housing shortage in the MENA region - especially in Saudi Arabia. The demand from expatriate renters has further intensified the housing shortage, with about 5.5 million ex-pat workers in the country (which is expected to grow as Saudi Arabia opens up).
With younger Saudi nationals and expatriates displaying a preference for apartments and more affordable properties, the government is taking steps, such as incentivizing developers to build affordable housing projects, thereby encouraging banks to introduce more home financing options.
Increasing homeownership for Saudi Arabian nationals to 70% by 2030 is a key ambition for the Saudi Arabian housing ministry, which announced a plan to build approximately 19,500 residential units for its citizens under the 'Sakani' housing development program.
The Kingdom has even introduced a rental price index to increase transparency and regulation in the residential real estate sector. These initiatives are anticipated to increase homeownership rates and strengthen the residential real estate market throughout the country.
SmartCrowd is the MENA region’s first regulated real estate investments platform and a pioneer in bringing alternative investments to the mass market. SmartCrowd is excited to continue that mission and to expand the offering even further by giving everyone a chance to build well-diversified portfolios beyond just stock, bonds, and cryptos. Its mission is to level global income inequality by providing universal access to solid rental property investment.
The business was established in UAE in 2018 and quickly attained recognition as the recipient of the Accenture Innovation Award. The business was granted a sandbox license from DFSA in 2018 and was one of the first to graduate to a fully licensed and regulated platform in November 2019. SmartCrowd is also a Hub 71-sponsored start-up and was part of the inaugural batch of 11 start-ups selected to set up a tech ecosystem in Abu Dhabi. They have been part of the program for the last two years and are one of the longest-serving start-ups within the fast-growing tech hub.