Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF) has set up a new real estate subsidiary called ROSHN to support the increasing regional demand for housing.
Even though the kingdom had spent billions of riyals in recent years to provide housing, the recent slump in oil prices has curbed government finances and forced it to look for private-sector partnerships for diversification of the economy.
The sovereign wealth fund gave no details on how much it has planned to spend on the new initiative or how many houses would be built. It said ROSHN aimed to increase strategic partnerships with real estate investors and support the development of the contracting sector through the adoption of modern and innovative technologies.
“We are proud to launch ROSHN, a national company specialized in developing modern residential compounds, as part of PIF strategy to develop (Saudi’s) real estate market,” it said in a tweet.
The Saudi government wants to increase activity in the real estate market and increase homeownership to 70% by 2030, from a figure which official statistics put at 62% at the end of 2019.
These objectives are part of the housing goals attached to the Vision 2030 reform program promoted by Crown Prince Mohammed bin Salman.
The fund which manages more than $300 billion in assets, has investments in domestic mega-projects including the $500 billion NEOM economic zone, the Red Sea tourism project, and Qiddiya, an entertainment development that will include a Six Flags theme park.
ROSHN will focus on nine cities in four main regions: Riyadh, Eastern Province, Mecca and Asir.