RIYADH: Government-owned Saudi Real Estate Refinance Co (SRC) said it had completed a 750 million riyal ($200 million) sukuk issue with multiple tenors, the first transaction by a non-sovereign issuer in Saudi Arabia in 2019. The issuance comes under a programme SRC established in December that allows it to issue up to 11 billion riyals of local currency-denominated Islamic bonds.

SRC, a wholly owned subsidiary of the kingdom’s sovereign wealth fund (PIF), aims to accelerate housing construction - a sensitive social issue and a top objective of economic reforms - by injecting liquidity into the real estate market.

Its target is to eventually refinance 20 per cent of Saudi Arabia’s primary home loans market, which authorities hope to expand to 500 billion riyals by 2020 and 800 billion riyals by 2028. Real estate financing hit 4.7 billion riyals in January. The company mandated HSBC Saudi Arabia as sole lead manager and bookrunner of the sukuk programme.

The programme may help the company become a major issuer in Saudi Arabia’s domestic bond market. Increasing activity in that market is another goal of economic reforms.

Saudi Arabia’s housing minister said last week he expected investments in the real estate financing sector to reach between 60 billion riyals and 80 billion riyals in 2019.

Meanwhile, Saudi Arabia has completed six public-private partnership deals in the past two months worth around $3.5 billion, and plans at least 23 more by 2022 despite some delays in its plan to engage the private sector, the head of its privatisation body said. “It’s better for the process to take a little bit longer to ensure it is done properly,” said Turki Al-Hokail, CEO of the National Centre for Privatisation and Public-Private Partnership (NCP), which is overseeing the process, told Reuters after a visit to London to meet prospective investors.

Reuters