Assessing the Potential of a MoU for Secondary Real Estate Financing Solutions
The Saudi Real Estate Refinance Company (SRC), a Public Investment Fund (PIF) Company, signed a Memorandum of Understanding (MoU) today, Wednesday, in New York City with King Street Capital Management. The agreement aims to foster cooperation and strategic partnership between the two parties in the real estate finance sector, under the patronage and in the presence of His Excellency Majed bin Abdullah Al-Hogail, Minister of Municipalities and Housing and Chairman of SRC.
The MoU, signed by Majeed Fahd Al-Abdul Jabbar, CEO of the SRC, and Brian J. Higgins, Managing Partner of King Street, is part of His Excellency the Minister of Municipalities and Housing’s official visit to the United States. The visit aims to explore ways to enhance partnership and cooperation between the two countries in the sectors of urban development, construction, building, finance, and real estate development.
The memorandum aims to diversify liquidity sources to support the secondary real estate finance market’s stability, foster economic growth, and attract more foreign investments to the Saudi market. This contributes to achieving the housing program targets outlined in the Kingdom’s Vision 2030. The memorandum also emphasizes the development of innovative financial instruments, such as the securitization of Sharia-compliant residential real estate finance portfolios. Saudi Real Estate Refinance Company is working to adapt these instruments to meet the standards of specialized global investors.
The CEO of the Saudi Real Estate Refinance Company, Majeed Al-Abdul Jabbar, confirmed that the signing of the MoU with King Street is part of our efforts to play a key supporting role in the housing system and the Financial Sector Development Programme by providing the necessary liquidity in the real estate finance market, diversifying financing options for the private sector, and creating a new asset class for investors. These efforts contribute to achieving the housing program’s goal of increasing the homeownership rate among Saudi citizens to 70% by 2030. Additionally, the agreement supports the growth and stability of the Saudi market while attracting both local and international investors.
The Managing Partner of King Street expressed his pleasure with the partnership and cooperation with the Kingdom of Saudi Arabia in launching the first program of its kind in the Saudi market. He noted that this initiative will contribute to developing local capital markets and creating a suitable structure to attract international investors who seek to enhance their portfolios with high-quality Saudi securities. He also highlighted that the program will benefit homeowners and the banking system, aligning with the goals of the Kingdom’s Vision 2030.
It is noteworthy that the Saudi Real Estate Refinance Company, established in 2017 by the Public Investment Fund, is a key government initiative aimed at achieving the housing program targets under the Kingdom’s Vision 2030. The company serves as a fundamental pillar in supporting the housing system by injecting liquidity into the residential real estate finance market, ensuring its continuity and stability. Additionally, the company has obtained a license from the Saudi Central Bank to operate in the field of real estate refinancing. King Street Capital Management is a global alternatives platform founded in New York in 1995. The firm invests across public and private markets with expertise in credit, restructurings, bankruptcies, rescue financings, corporate and asset-based lending, structured credit and real estate.
