Saudi Arabia: Real estate in Saudi Arabia now represents a third of all assets under management in the Kingdom, according to the Capital Market Authority’s chairman.

Speaking on the sidelines of the Real Estate Future Forum in Riyadh, Mohammed bin Abdullah El-Kuwaiz said the sector’s value stood at SR170 billion ($45.3 billion) at the end of the third quarter of 2023.

The official also highlighted the huge potential in the industry which can be achieved through various types of financing available in the capital market, including offering and listing opportunities, and leveraging the debt market to expand growth.

He said: “Some believe that real estate financing through the market is limited to offering and capital increases, but the truth is completely different because the offering and capital increases constitute less than 10 percent of the financing coming through the market, while the largest percentage of financing comes from real estate funds.”

He also explained that this surge demonstrated the growing importance of real estate financing through the financial market in the Kingdom.

In a report by KPMG published in October 2023, real estate was flagged as the primary form of alternative investment in Saudi Arabia, providing opportunities for retail investors to participate in the Kingdom’s rapidly expanding property market.

The report said: “Real estate investment trusts (REITs), structured and traded, have gained popularity in recent years. The biggest number of public and private investment funds subscribers were in the operating funds in the real estate sector,”

“The real estate funds market is growing rapidly as we have observed the real estate funds increasing from 204 as of June 2022 to 337 as of 30 June 2023,” it added.

Speaking at the Real Estate Future Forum, the CMA’s chairman pointed out that REITs were one of the various real estate products and funds currently available in the market, as well as income, development, closed-end traded, and others distributed by fund distribution platforms.

He also emphasized that there were large financing requirements to transform “ambition” in the real estate sector into “reality,” especially in light of housing programs, ownership plans and other major projects.