Business | Property

Saudi government approves two new real estate firms

In a bid to boost real estate investments in Saudi Arabia, the ministry of commerce and industry has licensed two stock companies to operate in the kingdom's market.

  • By Mariam Al Hakeem, Correspondent
  • Published: 00:00 April 28, 2007
  • Gulf News

Riyadh: In a bid to boost real estate investments in Saudi Arabia, the ministry of commerce and industry has licensed two stock companies to operate in the kingdom's market.

Up to the end of the second quarter of 2006 Saudi banks have pumped 13.4 billion riyals into financing real estate projects in the kingdom. An official was quoted recently as saying that in order to meet demand, Saudi Arabia will need to build 1.5 million new homes by 2015.

The increasing population growth rate, one of the highest in the world, and high demand on housing units means Saudi Arabia, needs to find other financing for real estate sector, besides the government.

The two newly licensed real estate companies, both based in Jeddah, are expected to enhance the real estate market in the western region. Al Shula Abraj Dubai Company is a closed joint stock company with a capital of 500 million Saudi riyals, while Al Qima Al Hadeetha for real estate investment and development is a closed joint stock company of a capital of ten million Saudi riyals.

The capital of the first company was divided into 50 million shares each of a 10 Saudi riyals nominal price, while the capital of the second firm is divided into one million shares of 10 Saudi riyals the nominal price of each share.

In order to meet the increasing demands on residential units, the Saudi government is exerting more efforts to boost the real estate sector.

Official figures claim about 55 per cent of Saudis own their own homes Although the government has made some progress in solving the country's housing problem a number of observers of the real estate sector believe that private institutions have more of a role to play.

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