Tamweel taps into Saudi mortgage market

by Reuters Monday, 09 July 2007

Dubai-based Islamic mortgage lender Tamweel said on Monday it had started a real estate finance company in Saudi Arabia with a local partner to tap growing demand for mortgages in the largest Arab economy.

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Tamweel, the UAE's second-biggest mortgage lender by market value, said it had formed a joint venture with Saudi firm al-Oula Real Estate Development and was in the process of receiving a real estate finance and mortgage licence.
Tamweel did not say how much it owns in the company.

"Saudi Arabia is considered to be the largest among the real estate markets in the region. The market has great potential to achieve consistent growth," Tamweel Chairman Sheikh Khaled al-Nahayan said in a statement.

The kingdom will need more than 200,000 residential units per year to meet demand, Tamweel Chief Executive Adel al-Shirawi said.

Tamweel said last month it would sell $220 million of asset-backed securities compliant with Islamic law to fund regional expansion.

Competition in offering mortgages in the UAE has increased since Dubai and Abu Dhabi opened their real estate sectors to foreign investment.

Tamweel is following Dubai rival Amlak Finance into Saudi Arabia.

Amlak said in May it had joined with local partners to create a Saudi company with a share capital of 1 billion riyals with a 99-year licence.



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