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Saudi Arabia is planning to issue real estate sukuk worth up to 150 billion Saudi riyals ($40 billion) by 2030, Arabic daily Al Eqtisadiah reported.
The Kingdom is waiting for geopolitical conditions to stabilise before launching annual real estate sukuk issuances of around SAR 20 billion riyals ($5.3 billion) starting this year, the report said, citing Saudi Minister of Municipalities and Housing Majid Al-Hogail at the World Urban Forum (WUF) in Azerbaijan this week.
The Gulf nation is counting on real estate bond issuances to ease the financing burden on its banking sector, which is already facing liquidity pressures amid financing for mega projects under Vision 2030.
Last year, the Public Investment Fund-owned Saudi Real Estate Refinance Company (SREC) listed a $5 billion international sukuk programme on the London Stock Exchange. Through the programme, SRC has already issued $2 billion in sukuk that attracted demand six times larger than the amount offered, according to a statement published on the sovereign wealth fund’s website.
Al-Hogail said Saudi Arabia has completed a package of measures aimed at regulating the real estate market following the approval last week of executive regulations governing fees on vacant properties, after previously introducing fees on undeveloped “white land”.
(Writing by P Deol; Editing by Anoop Menon)
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