Dar Al Majid Real Estate Company (“Al Majidiyah”) announced last Thursday, in a strategic move aimed at strengthening its financial position, the signing of a Sharia-compliant banking facilities agreement with Alinma Bank. This step comes as part of the company’s ongoing efforts to develop its business and keep pace with the urban development boom taking place in the Kingdom of Saudi Arabia.
Agreement and financing details
In an official statement published on the Saudi Stock Exchange (Tadawul) website, the company clarified that the total value of the financing is SAR 500 million. The financing period is set at 10 years, granting the company significant financial flexibility to implement its long-term plans. The agreement also includes an additional three-year grace period, reflecting the mutual trust between the parties and the company's strong financial position. Regarding collateral, Al-Majidiyah stated that the financing was secured by a promissory note.
Promoting real estate expansion and sustainable growth
The company indicated that the primary objective of these facilities is to strengthen its financial position and support expansions in real estate development projects. Through this cash injection, Al Majdiyah aims to achieve its sustainable growth targets by injecting new investments into residential and commercial projects that meet the growing market demand and contribute to improving the quality of life in line with the aspirations of customers and investors.
Real estate sector recovery in light of Vision 2030
This agreement comes at a time when the real estate sector in Saudi Arabia is experiencing an unprecedented boom, driven by the goals of Vision 2030, which places great emphasis on the housing sector. The Vision aims to increase homeownership among citizens to 70% by 2030, creating a fertile investment environment for real estate development companies. The credit facilities obtained by major companies like Al Majdiyah are a key driver for accelerating construction and increasing the supply of real estate in the market, thus contributing to a balance between supply and demand.
The role of the banking sector in economic development
This agreement reflects the pivotal role played by the Saudi banking sector, represented by Alinma Bank and other national banks, in supporting economic development. By offering flexible, Sharia-compliant financing solutions, banks contribute to empowering the private sector to implement major projects that add value to the national economy. Real estate financing is one of the most important channels for injecting liquidity into the economy, thereby stimulating numerous supporting sectors such as contracting, building materials, and engineering services.
Expected impact on the local market
This financing is expected to positively impact Al Majdiyah Company's operations in the coming period, enabling it to acquire new land and develop modern residential complexes. This activity will not only enhance the company's profits and market position but will also contribute to creating new job opportunities and stimulating commercial activity in the areas where these projects are located, ultimately benefiting the local economy and society as a whole.
