The Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, has launched ROSHN, a company that will develop integrated urban communities across the kingdom.
The company will "follow international principles and practices in community planning and design" to develop new urban locations that will help to meet growing demand in the domestic housing market, PIF said in a statement. It will also help to localise global design skills.
This is the latest in a line of initiatives aimed at growing home ownership in the kingdom, which have included the launch of the Real Estate Development Fund to provide subsidised loans and the Saudi Real Estate Refinancing Company to provide liquidity in the home loans market.
In May, Saudi Arabia tripled VAT from 5 per cent to 15 per cent to shore up the country’s finances that have been hit by low oil prices and the coronavirus pandemic. The move affected a wide range of sectors in the kingdom, including real estate. However, to soften the blow, the country’s minister of housing agreed to absorb the tax increase for first time buyers on units worth 850,000 Saudi riyals or less (Dh832,000), in an effort to stimulate demand for affordable homes in the country.
ROSHN will reinforce PIF’s contribution to create strategic partnerships between the Saudi private sector and private investors, the statement issued on Wednesday said.
The projects launched by the new company will adopt innovative construction methods and infrastructure techniques.
The company’s establishment is part of PIF’s Investment Strategy to contribute to Vision 2030 by increasing the country’s home ownership level to 70 per cent and improving standards of living.
The construction of new urban communities, together with the requirement for supporting infrastructure, amenities and ongoing maintenance services, will also create ongoing jobs in the kingdom.
Thousands of new units are expected to be delivered in the second half of this year across Saudi Arabia, according to property consultancy JLL. In Riyadh, 15,000 units will be delivered while in Jeddah and Makkah, the numbers are expected to be 8,000 and 6,000 respectively, according to a JLL report published last month.
