Huge real estate deal worth SR2.7 bln completed in eastern Riyadh

A huge real estate deal valued at about SR 2.7 billion on an area of 27 million square meters at a price of 100 riyals per raw metre has been completed, Maaal reported citing sources. The land is located in the east of the capital, Riyadh, on Dammam Road after the East Gate project and near the power station, where the land was purchased – according to the sources – through the Ajlan & Brothers Group.

The deal comes at a time when the population of Riyadh is expected to reach 20 million. According to preliminary data, the land will be planned and developed, and the sale will take place after development within two years. It is expected to include more than 50,000 housing units.

According to real estate developers who spoke to Maaal, the deal is expected to have a significant positive impact on the price balance in the east of the capital, as it is expected that the real estate development in east Riyadh will help provide large quantities of real estate units for the residents of the capital and its future, in light of the real estate movement east of the capital, where this deal comes days after Al Muzaini Real Estate Company announced the signing of an agreement to sell the Al Aliya residential scheme, located east of Riyadh, with an area of more than three million square meters, to a real estate alliance with a value of more than SR 2 billion.

The real estate market has witnessed movement during the recent period, as it announced last week another billion deal, as the northern part of the airport jewel scheme in Dammam was sold to a coalition that includes Adair Holding Company and Adl Real Estate Company after purchasing an area exceeding 4.5 million square meters of the scheme, at a value of A total of 2.2 billion riyals from the Ajlan & Brothers Group, which had completed the purchase of the scheme in the year 2020 through the largest real estate auction held in the Kingdom. Whereas, the group had bought the entire scheme with a total value of nearly 2 billion raw riyals, after the real estate contribution to the scheme faltered for nearly 30 years.

The capital, Riyadh, is witnessing rapid growth observed during the last period at the level of the housing sector, which was represented by an increase in the pumping of various housing projects, including more than 20 integrated and government-supported projects, as well as other projects at the level of the housing market in light of a balanced and sustainable environment and the availability of a number of regulations and supporting legislation and stimulating active participation in this sector.

It is targeted that the percentage of ownership of housing units for citizens will reach 70% by the end of 2030, with the provision of 40,000 development housing units to support families in need by the end of 2025, and 355 thousand new financing contracts with the aim of continuing to provide financing contracts by the end of 2025.

According to the Saudi Central Bank, the volume of new residential real estate financing provided to individuals by banks amounted to 8.81 billion riyals during the month of May 2022, a decrease of 1% compared to the same period in 2021.

It should be noted that Fitch Ratings expected a rise in real estate financing in Saudi banks’ portfolios, noting that Saudi banks should take advantage of any opportunity to diversify their lending portfolios. It added that by the end of the first quarter of this year, the agency found that 20% of banks’ financing is directed to real estate lending to individuals.