Saudi Arabia is capturing the spotlight as an enticing investment hub, attracting both local and international investors eager to tap into the Kingdom’s burgeoning opportunities. A leading figure from a top global asset management firm highlights this trend and its potential.
Yazeed Al-Mubarak, Managing Director and Head of Middle East Client Business at BlackRock, discussed the increasing interest among global clients in Middle Eastern assets. He emphasized the growing appeal of Saudi Arabia, particularly with the Kingdom’s ambitious Vision 2030 and its associated capital investments coming to fruition.
A Strategic Partnership to Transform Real Estate Finance
In a significant move, BlackRock signed a memorandum of understanding with the Saudi Real Estate Refinance Company (SRC), wholly owned by the Kingdom’s sovereign wealth fund. This agreement, formalized in New York, aims to revolutionize the real estate finance sector in Saudi Arabia, enhancing the industry’s presence in capital markets.
The collaboration is set to pave the way for mortgage refinancing solutions tailored for Saudi banks and housing finance companies. Al-Mubarak noted that SRC is spearheading efforts to engage global institutional investors with a robust and expanding fixed-income asset class.
Aligning with Vision 2030 for Future Growth
The partnership is poised to bolster the Saudi housing sector, which is experiencing rapid growth fueled by population expansion, urbanization, and strategic government initiatives. Central to this growth is the Vision 2030 Housing Program, aiming to elevate homeownership rates to 70% by 2030.
Al-Mubarak highlighted that the mortgage market has witnessed a fourfold increase over five years, surpassing $150 billion, with expectations to reach nearly $200 billion. However, momentum slowed recently due to rising home prices, increased mortgage rates, and reduced subsidy programs.
To support this burgeoning growth, SRC plans to issue securitizations both locally and internationally, enhancing funding capacity and contributing to the development of Saudi Arabia’s debt capital markets.
Al-Mubarak also mentioned BlackRock Riyadh Investment Management (BRIM), launched with an initial investment mandate from the Public Investment Fund. BRIM is set to expand Saudi Arabia’s asset management sector, offering a diverse array of investment strategies to Middle Eastern and global clients.
Looking ahead, Al-Mubarak envisions developing the Kingdom’s mortgage securitization framework and related investment strategies, facilitating investor access to this promising market. While no definitive plans are set, BlackRock remains enthusiastic about future collaborations with SRC and the Ministry of Municipalities and Housing.
