Jadwa Investment, Saudi’s asset management and advisory company, set up a property fund costing 1 billion Saudi riyals ($266 million) to build prime residential projects in the kingdom.
Al Dar Investment Fund will build more than 1,500 residential units in Riyadh, through various apartment complexes focusing on medium-to high-income households.
Jadwa, which set up the shut end investment vehicle with Al Majdiah Group and Riyad Bank, oversees resources worth 35bn riyals.
The resources are in the public market, private equity, property, private credit, and fixed pay sections.
The Sharia-compliant fund has a provision for two one-year extensions.
Jadwa chief executive and managing director Tariq Al-Sudairy said it was set up in line with the company’s “policy of pursuing diversified investment opportunities across asset classes”.
“We have been very active in the local real estate market where we see strong investment fundamentals.”
The investment vehicle has been set up to gain by developing interest for private property in the kingdom.
House purchasing in Saudi Arabia is one of the central planks of Vision 2030, the kingdom’s financial and social transformation program.
The nation has surpassed its 2020 target of expanding the level of house ownership among Saudi residents to 60 percent. The government presently expects to help the proportion to 70 percent by 2030.
The kingdom plans to transform Riyadh into one of the main 10 city economies in the world.
Saudi Crown Prince Mohammed Bin Salman said in January that the government intends to twofold the city’s population by 2030.
Riyadh has a population of 7.5 million.
The kingdom is contributing $220bn to change the capital and expects to draw in a similar level of speculation from the private area, as per Fahd Al Rasheed, president of the Royal Commission for Riyadh City.
Jadwa’s managing director and property boss Haitham Al Ghannam said the record demand shown during the fund’s offering period showed “the attractiveness of the local residential real estate market today, particularly in Riyadh, where we intend to expand further”.