Roshn, Saudi Arabia's biggest developer owned by the kingdom's Public Investment Fund, and the National Housing Company signed a preliminary agreement to jointly build residential communities to meet the growing demand for housing in the country.
The agreement forges a “sustainable and pivotal relationship between the two companies … to build residential communities that meet the aspirations of families in Saudi Arabia”, according to a statement on NHC’s LinkedIn page.
Saudi Arabia is focused on diversifying its economy under the Vision 2030 programme that aims to develop local industries and cut its dependence on hydrocarbons.
The PIF is a central plank of Riyadh’s efforts to nurture local industry, develop new non-oil sectors and boost employment in the kingdom. In January, the sovereign wealth fund unveiled a five-year strategy under which it intends to double its assets to $1.07 trillion and invest a minimum of $40 billion a year into the kingdom’s economy until 2025.
The kingdom has set an ambitious target of raising home ownership among Saudis in the kingdom to 70 per cent by 2030 under the Sakani programme — a joint initiative between the Ministry of Housing and the Real Estate Development Fund — that supports and enables Saudi citizens to own their first home.
About 88,000 households were beneficiaries of the programme in the first half of this year as the real estate market continues to expand, Knight Frank said.
Apartment prices in Riyadh jumped 17 per cent annually in the third quarter while villa prices increased about 10 per cent, fuelled by a growing population, according to a Knight Frank report.
The PIF-backed Roshn is a master developer and, which was established to make long-term investments across Saudi Arabia by developing residential communities, according to its website.
Roshn is currently working on housing projects in nine cities across four regions in Saudi Arabia — Makkah, Riyadh, Eastern Region and Asir. The company is developing a total area of 150 million square metres across all four regions.
The PIF will play a pivotal role in securing the necessary funds in the early stages of Roshn’s projects, particularly for the development of infrastructure, and through the provision of land, the master developer said on its website.
Home buyers in Roshn communities will have access to mortgage programmes offered by the Ministry of Housing, the developer said.
Roshn’s mandate is to “deliver a community development programme at rapid scale to dramatically reduce the gap between market demand and supply”, according to the developer’s website.
The delivery of residential units in both Riyadh and Jeddah continued at pace in the third quarter of 2021 as the government made further progress to boost home ownership the percentage of Saudi families, according to global real estate consultancy JLL's report.
“Housing projects announced by the NHC have seen strong take-up, including Rawa project in the north of Riyadh and Maylaa in Jeddah. A significant proportion of these schemes comprise small to medium-sized units for lower and middle-income families that qualify for the Sakani programme,” JLL said in the report.
“Looking ahead, government initiatives pushing for Riyadh to be the business hub of the region are expected to underpin residential demand (from both Saudi nationals and expatriates). By comparison, demand for Jeddah’s residential sector is likely to be continued to be driven by the local population,” the report added.