Development Housing Initiative, part of Saudi Arabia’s Ministry of Housing, signed an agreement with US-based contractor Katerra to build 4101 homes across the kingdom, as part of government plans to increase home ownership among citizens.
Katerra is a Silicon Valley start-up backed by Japan’s SoftBank, a multinational whose $100 billion SoftBank Vision Fund is backed by Saudi Arabia’s Public Investment Fund.
Katerra, which specialises in building pre-fabricated (pre-fab) homes, received an $865 million investment from SoftBank last January and a further $700m in January this year. It handles all elements of the construction process – from design, manufacturing of component parts, and site assembly – through a digital project management platform.
Under the deal with Saudi’s Development Housing Initiative, Katerra will build 4,140 individual homes across the kingdom, intended for beneficiaries of the social housing initiative.
Saudi Arabia aims to increase home ownership to 52 per cent of citizens, from around 47 per cent, as part of its Vision 2030 economic transformation programme.
A three year slump in oil prices that began in 2014 but has since changed course, had slowed the Middle East’s largest oil exporting economy. A growing population that swelled more than 40 per cent over the past decade to over 32 million people has also increased demand for affordable housing.
Under the deal with Katerra, 2,482 housing units will be built in Makkah, 1,043 in Madinah region, 140 in Al Baha, 191 in Al Jawf, and 245 units in Al Qasim, Katerra said in a statement to media on Wednesday.
The US-based company plans to “rapidly expand its operations in the Saudi market”, and revolutionise the kingdom’s construction sector with advanced construction technology and global practices, it said.