Saudi SRC Collaborates With King Street To Boost Real-Estate Finance Sector

The Saudi Real Estate Refinance Company (SRC), a Public Investment Fund (PIF) entity, signed a memorandum of understanding (MoU) with King Street Capital Management in New York City. The agreement aims to foster cooperation and strategic partnership in the real-estate finance sector. This MoU was signed under the patronage of Minister of Municipalities and Housing and SRC chairman Majed bin Abdullah Al-Hogail.

King Street’s managing partner Brian J. Higgins expressed his pleasure with the collaboration, noting that it will help develop local capital markets. He stated, "The 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." Higgins also highlighted that this program aligns with the goals of the Kingdom’s Vision 2030.

SRC chief executive Majeed Fahd Al-Abdul Jabbar emphasized that this MoU is part of efforts to support the housing system and the Financial Sector Development Program. These efforts aim to provide necessary liquidity in the real-estate finance market, diversify financing options for the private sector, and create a new asset class for investors. This initiative is expected to contribute significantly to achieving the housing program’s goal of increasing homeownership among Saudi citizens to 70% by 2030.

The MoU also focuses on developing innovative financial instruments such as securitizing Sharia-compliant residential real-estate finance portfolios. SRC is working on adapting these instruments to meet global investor standards. This move aims to diversify liquidity sources, support secondary real-estate finance market stability, foster economic growth, and attract more foreign investments into Saudi Arabia.

This agreement supports both local and international investor growth while ensuring market stability in Saudi Arabia. The collaboration between SRC and King Street Capital Management is seen as a significant step towards achieving these objectives. The partnership aims to enhance urban development, construction, building, finance, and real-estate development sectors between Saudi Arabia and the United States.

The signing ceremony was part of Minister Majed bin Abdullah Al-Hogail's official visit to the United States. This visit aimed at exploring ways to enhance partnerships between the two countries in various sectors including urban development and real estate.

SRC's Role in Vision 2030

SRC was established in 2017 by PIF as a key government initiative aimed at achieving housing program targets under Vision 2030. The company plays a crucial role in supporting the housing system by injecting liquidity into the residential real-estate finance market, ensuring its continuity and stability. Additionally, SRC has obtained a license from the Saudi Central Bank for operations in real-estate refinancing.

King Street Capital Management, founded in New York in 1995, is a global alternatives platform investing across public and private markets. The firm has expertise in credit, restructurings, bankruptcies, rescue financings, corporate lending, structured credit, and real estate.

This MoU marks an important milestone for both SRC and King Street Capital Management as they work together towards common goals that align with Vision 2030's objectives. The collaboration is expected to bring significant benefits not only to homeowners but also to the banking system within Saudi Arabia.

With inputs from SPA