Press Release

• SRC signs portfolio acquisition worth more than SAR 3 billion for part of the Masakin Programme of the Public Pension Agency
• The agreement provides liquidity to the real estate financing market that is expected to reduce prices and increase origination of new mortgages

Riyadh, Saudi Arabia; 16 July 2020: Saudi Real Estate Refinance Company (SRC), a subsidiary of Saudi Arabia’s Public Investment Fund (PIF), has signed an agreement with the Public Pension Agency (PPA) to acquire mortgage portfolio in excess of SAR 3 billion making it the largest ever real estate financing transaction and a first-of-its-kind in the Kingdom.

This agreement, pending regulatory approval, will aid in the achievement of the Masakin Programme’s existing objectives and will provide increased liquidity to the real estate financing market and facilitate low-cost mortgages for Saudi nationals. The agreement reinstates SRC’s commitment to providing innovative solutions to consumers that contribute to increased homeownership rates in the Kingdom, in accordance with Saudi Arabia’s Vision 2030. The agreement also reinforces the PPA’s robust real estate portfolio and its attractive investor propositions.

“The agreement relates to the Masakin Programme; a PPA sponsored initiative that provides fixed-rate Murabaha home financing solutions to employees and pensioners from PPA and the General Organisation for Social Insurance (GOSI), with an aim to encourage homeownership in the Kingdom. The Masakin Programme is one of the most well-known initiatives in the Kingdom that enables citizens to get fixed rate mortgages for their homes. Having financed over 9,000 transactions to date over the last decade, the programme was extended the ‘Sakani’ award by the Ministry of Housing in 2019 for its outstanding financing services .,” His Excellency Mohammed Al Nahhas, Governor of PPA said.

“The scale and magnitude of our agreement with PPA enunciates our commitment to exploring different avenues to help the citizens of Saudi Arabia climb the housing ladder. The deal provides liquidity to the real estate financing market, which in turn is expected to bring lower prices and increase the number of mortgage originations – leading to SRC’s goal of improving homeownership rates in the Kingdom,” Fabrice Susini, CEO of SRC said.

“The agreement provides the mortgage financing industry an opportunity to refinance their assets that would otherwise be sitting in their books for a decade or two, by offloading mortgage portfolios to SRC. Such an avenue is expected to make the real estate financing market in the Kingdom attractive to investors. We encourage industry participants to get in touch with us to explore liquidating real estate mortgage assets in their books, and continue to originate more mortgages, thereby improving the overall real estate financing industry and homeownership in the Kingdom,” Susini added.

“Dar Al Tamleek is proud to be the recognized leader in providing seamless end-to-end mortgage fulfillment under dedicated program management arrangements. Over the last decade, as program manager for the PPA Masakin program, DAT has grown Masakin into one of the most successful home finance programs in the Kingdom. The SRC-PPA agreement is validation of the high quality assets that DAT has originated for PPA and will service for SRC as we continue to set the “gold standard” in the industry for portfolio performance. We look forward to continuing our strong partnership with PPA and the Masakin program, expanding our relationship with SRC, and leveraging our proprietary technology to quickly bring new program management arrangements to market that support the homeownership aspirations of Saudi citizens in alignment with Vision 2030.” Ghassan Amodi, CEO of DAT said.

With the landmark transaction, SRC, which started in 2017 with a goal of improving the real estate financing industry in Saudi Arabia, has now become the major acquirer of real estate portfolios in the Kingdom, having acquired portfolios from Banks, Mortgage Finance Companies and NBFIs. SRC’s goal is to deploy more than SAR 20 billion, mainly through purchasing mortgage portfolios with an aim to refinance 10% of the home loans this year.