LONDON: Saudi market regulators have approved the planned initial public offering (IPO) of a home finance company amid rising demand for Saudi property ownership.
The Capital Market Authority said it had approved the IPO of Amlak International for Real Estate Finance Company, the Riyadh-based company that is affiliated with the UAE’s Amlak Finance. The approval covers a 30 percent listing of the company and is valid for six months according to a filing on the Kingdom’s Tadawul stock exchange.
Riyadh currently has a supply of about 1,252,000 residential units according to CBRE data with an expected delivery of 130,000 additional units by 2022.
Much of the anticipated increase in home construction comes from the government’s push to provide Saudi citizens with more affordable housing options.
“The Saudi Ministry of Housing has been particularly active in meeting such demand through a number of programs including the ‘Sakani’ initiative aimed at increasing the national rate of home ownership to 70 percent by 2030,” CBRE said in a report released earlier this year.
Saudi banks have been increasing their mortgage portfolios at a rate of about 30 percent a year over the last two years according to S&P Global Ratings.
At the same time, the government has lowered regulatory requirements for mortgage exposures in an effort to stimulate the sector. Amlak International was set up in 2007 with investors that included the Saudi Investment Bank, and Al Tawfeek Development House.
Extending home-ownership is one of the keystones of the Vision 2030 strategy to diversify the economy away from oil production. Saudi Arabia has one of the lowest rates of mortgage penetration of any G20 country — in single digit percentages, compared with others at up to 50 percent.
Copyright: Arab News © 2019 All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info).