Amlak and Al Baraka launch $267m Islamic finance firm

Jeddah: Dubai-based Amlak and Saudi Arabia's Dallah Al Baraka Group yesterday launched an Islamic finance company with a capital investment of $266.6 million.

An agreement was signed here yesterday for the Sharia-compliant Saudi-UAE joint venture.

Formation of Amlak International Co is the result of an alliance of major financing and real estate development companies in the Gulf. The alliance, led by the Saudi Al Baraka Investment and Development Company, is also comprised of UAE's Amlak as well as three Saudi companies - Saudi Investment Bank, Aseer Company, and Trading Company Limited for Marketing Services and Agencies.

Shaikh Saleh Kamel, who was chosen as the president of the board of directors of the new company, said that the company's activities will be focused on extending financing and real estate development services for both individuals as well as for firms and companies.

"It will also be engaged in trade financing as well as in improving the purchasing power of individuals and supporting them in realising their dream of owning a house," he said.

The new company, which is under formation, is regarded as the first of its kind in extending Sharia compliant financing and real estate development services. The Saudi Arabian Monetary Agency (Sama), the central bank, has granted a licence for the company. The Riyadh-based company will start operation in the third quarter of 2007.

Saudi Arabia is currently witnessing an unprecedented economic boom, spurred by a surge in prices of oil and a huge flow of foreign investments. The government is started implementing several mega projects, especially a number of master-planned projects, such as King Abdullah Economic City, Prince Abdul Aziz Bin Musaed Economic City in Hail, and a Knowledge City in Madinah.

All these cities are estimated to cost more than 200 billion Saudi riyals. Preliminary studies showed that Saudi Arabia needs some 100,000 housing units annually to accommodate the fast growing population.