Damanat and BlackRock to Develop Saudi Real Estate Market

Damanat, Saudi Mortgage Guarantees Services Company, has signed an agreement with the BlackRock to develop Saudi mortgage-related investment strategies and funds, designed for participation by a diverse group of fixed-income investors.

The signing took place in BlackRock’s New York headquarters in the presence of Saudi Arabia’s Minister of Municipalities and Housing and Chairman of Real Estate Development Fund Majed bin Abdullah Al-Hogail and President of BlackRock Robert S Kapito.

The agreement was signed by the Damanat CEO Hossam Yousef Radwan, and the Managing Director, BlackRock Middle East and CEO of BlackRock Saudi Arabia Yazeed Almubarak on Saturday and this partnership aims to advance Damanat’s goal of developing mortgage guarantee products to enhance the securities market and attract foreign capital flows.

Damanat, with its innovative and differentiated role as Saudi Arabia’s provider of guarantees for mortgage-related assets, will partner with BlackRock on the launch of Saudi mortgage-related investment strategies and funds.

Earlier this year, BlackRock announced plans to establish BlackRock Riyadh Investment Management (BRIM), which will encompass investment strategies across a range of asset classes for the Saudi market, including both public and private markets, managed by a Riyadh-based investment team.

Addressing Housing Shortage

Speaking on the occasion, Hossam Radwan said that Saudi Arabia’s goal is to reach 70% home ownership by 2030 and through their guarantee solutions Damanat continues to bridge the supply and demand gap within the real estate sector.

“The agreement with BlackRock, will allow both local and international investors access to quality mortgage-backed fixed income funds and products, which will in turn enhance financing capacity within the local eco-system and also promote the development of local fixed income capital markets. As an enabler within the housing eco-system, creating such partnerships and development of new and innovative solutions for the Kingdom is an integral part of Damanat’s long-term strategy,” Radwan added.

With significant untapped opportunities for fixed-income investors awaiting market development. Damanat is playing an innovative and pivotal role as an enabler of investor interest in Saudi housing financing and growing the depth of mortgage-related capital markets.

Damanat and BlackRock share the objective of enabling global institutional investors to participate in this growing, high-quality fixed-income asset class.

Yazeed Almubarak said that BlackRock was looking forward to partnering with Damanat in the evolution of Saudi Arabia’s housing-related capital markets. Securitised mortgage assets have the potential to become an important new asset class that further develops the asset management industry in Saudi Arabia in line with the goals of Vision 2030, the Financial Sector Development Program and the Housing Program.

“BlackRock was founded as a mortgage-focused fixed income manager with a focus on innovation and entrepreneurial solutions. Since the establishment of our business in Saudi Arabia, we have been driven with the same entrepreneurial approach and dedication, so we are honored to be playing a part in this important Vision 2030 initiative,” he added.

About Damanat

Damanat was established as a closed joint stock company fully owned by the Real Estate Development Fund (REDF) with a capital of $4.95 billion. On 9 July 2023, Damanat was granted a license by the Insurance Authority.

Damanat seeks to contribute to achieving the goals of the Housing Program, and Vision 2030 by supporting the housing market to raise the percentage of Saudi families’ ownership of homes to 70%, and develop a secondary market for real estate mortgages in the Kingdom.

The company provides mortgage guarantees to banks and financial institutions, insurance products and innovative solutions to individuals and corporate entities.