JEDDAH, 29 May — The founding committee of a new SR1 billion Saudi real estate financing company will be constituted next month in Riyadh to set the pace for the firm’s establishment.
A report on the strategies and mechanism of the proposed company, named National Company for Real Estate Financing, has been prepared by a number of local banks, Al-Watan newspaper reported quoting informed sources.
Riyad Bank, National Commercial Bank, Saudi American Bank, Saudi British Bank and Bank Alsaudi Alfransi have expressed initial willingness to contribute to the company’s capitalization. The Ministry of Finance and National Economy has also expressed readiness to grant guarantees to the proposed company so that the capitalization process will be expedited.
With the setting up of the company, the real estate committee of the Riyadh Chamber of Commerce and Industry aims to meet the need of people, particularly youths who constitute the largest segment of the Saudi population, who seek to own houses.
The company’s first phase will be launched this year itself in Riyadh whose estimated need is put at 300,000 units, the source said.
However, the source did not reveal the size of each bank’s share in the capital. It will be determined at a general meeting to be chaired by the minister of finance and national economy.
The government is known to be keen to solve the acute housing problem being experienced in the Kingdom where the population is growing at an annual rate of three percent. The government had this objective in mind when it allocated SR2 billion for the Real Estate Development Fund in the 2002 budget.
Abdullatif Al-Sheikh, planning head at the Riyadh Development Authority, said recently that the Saudi capital needs annual investments of SR55 billion for the next two decades to cope with the city’s growing population.
According to a study conducted by the authority, Riyadh’s population is increasing by 32 percent a year, due largely to the migration of growing numbers of Saudis from rural areas.
