NCBC and SEDCO launch development fund

The fund aims at providing reasonably affordable accommodation

NEWS, Business, Development, Fund, Residential, Saudi Arabia

NCB Capital and Saudi Economic and Development Company (SEDCO) Development Company launched the AlAhli SEDCO Residential Development Fund that provides affordable housing for middle and upper income home buyers.

With Jeddah’s continuing rise in population and the declining size of family households, the overall supply of housing units in Jeddah is becoming increasingly inadequate compared to the steeply rising demand. Jeddah’s residential market-wide gap is estimated to be 21,000 units per year.

"Residential projects in the pipeline are not keeping up and through our partnership with SEDCO Development we have the opportunity to realise the investment potential of the market shortage,” said Tariq Linjawi, acting CEO and head of wealth management at NCB capital.

The fund is a Shariah-compliant investment opportunity that provides investors with capital growth by purchasing land plots in Jeddah for development, construction and sale of residential apartments targeting the middle income segment of the population.

The minimum subscription is SR 50,000 ($13,332) and the fund aims to have an internal rate of return of 10% per year.

Real estate financing is expected to increase by 60% during 2014-2019 and the introduction of the Mortgage Law is expected to further drive demand.

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