Saudi Real Estate Refinance eyes SAR 14 bln asset refinancing in 2023: CEO

Fabrice Susini, CEO of Saudi Real Estate Refinance Co. (SRC)

Saudi Real Estate Refinance Co. (SRC) aims to refinance nearly SAR 14 billion worth of additional assets this year, CEO Fabrice Susini told Argaam on the sidelines of the Real Estate Future Forum.

The company will largely focus in the coming period on supporting liquidity in the mortgage market by issuing domestic sukuk, Susini added, expecting to close an international sukuk program and have an inaugural issuance in the first half of 2023.

“We expect to develop new products that will allow us to expand footprint in the capital market,” Susini said adding that corporate sukuk and bonds will be arranged to address the demand or the requests of banks and mortgage finance companies.

SRC refinanced nearly SAR 30 billion assets by the end of 2022, while the its local portfolio exceeds SAR 23 billion.

The company’s assets see positive and healthy growth. In 2022, it continued to provide liquidity for banks mortgage financing and refinancing firms, and refinanced an increasing number of assets.  

In 2022, SRC decided to issue more SAR-denominated sukuk. It issued SAR 7 billion sukuk last year, compared to SAR 5 billion sukuk in 2021, implying its growth and important rule in providing liquidity in the mortgage market.

The company always targets nationals, considering the impact of mortgage finance and product prices on them. It works on enabling the Kingdom’s objectives of raising home ownership rate to 70% by 2030.

Commenting on interest rates, Susini said it is too early to speak about the impact. The data issued by the Saudi Central Bank (SAMA) showed a drop in mortgages in November 2022, compared to the previous month.

“We expect 20:22 to close in terms of new mortgage originated at roughly 20 percent below 2021,” Susini said.

Despite this drop, numbers remain much higher than in 2028 or 2019, he elaborated, adding that a decline in mortgages is attributed to higher interest.

The CEO added that SRC is cooperating with the Real Estate Development Fund and the Housing Program to continue supporting mortgage loans to be attractive for Saudis.

The company always supports real estate financing firms in terms of liquidity and risk management, to provide more appropriate opportunities for nationals. The company’s offering of mortgage product at a fixed rate of 30 years supports borrowers.