Safqah Capital eyes Saudi listing with SAR 5B in financing

Safqah Capital plans to list on the Saudi Stock Exchange after building a financing portfolio of nearly SAR 5 billion since its launch about two years ago, CEO Abdullah Alsubaie said.

The platform has funded real estate development projects that delivered around 5,000 housing units to the market. The value of guarantees in its portfolio exceeds twice the financing volume, Alsubaie told Argaam on the sidelines of the Money20/20 Middle East conference in Riyadh. The average annual return for investors through the platform stands at about 14.5%.

Safqah Capital provides financing to real estate developers using sukuk and debt instruments. Its products cover land acquisition, development, raw land and mixed-use projects. Financing costs are higher for land acquisition because of the larger upfront funding requirement, compared with development financing, which is disbursed in installments tied to project completion.

Alsubaie said the real estate market is moving into a more mature phase after a period of sharp increases in land prices and project margins. Developers need to focus on return on equity rather than the profit margin of an individual project, he added. Regulatory changes, including white land fees and rules on leasing and foreign ownership, have pushed developers toward more institutional business models.

The greatest impact has emerged at the unit sales stage, Alsubaie said, citing factors such as changes in the real estate sector and liquidity challenges in the banking sector that have affected customers' purchasing power.