Abdallah Al Howaish
CEO and Managing Director of
As the first one-stop shop for mortgages, Amlak International was created as a joint venture by Al Baraka Group, the Saudi Investment Bank and Amlak Finance Dubai. The company, which has a paid-up capital of SR 1 billion, started its operations in mid-2008. “We mostly finance projects for real estate and retail,” says CEO and Managing Director Abdullah Al Howaish. “We are the first mortgage providers for off-plan houses. We have been able to profile ourselves through our specific approach, which does not just consist of financing the end user's purchase, but also the developers, whom we either finance or become partners with. We had no choice really: we wanted to provide housing that suits our prospective clients, that is adapted to the market.”
Indeed, although there is an enormous demand for housing in the country, only 10-15% of it is properly supplied. “Developers who come to KSA,” Al Howaish explains, “tend to think they are in the Emirates and build houses 3 to 4 times more expensive than the Saudi citizen can afford. But contrary to the UAE, we have a real demand here and we should not just build for speculation. What we need here – and what is therefore the most profitable deal – is affordable, reliable housing within reach of city amenities and utilities. We work with selected developers who are willing and able to provide this, and now have selling prices between SR 3,000 and 4,500 per square meter - one third of what other developers were asking. This results in house prices between SR 500,000 and 1 to 1.5 million. This is working out well because this is what the really existing demand is for.”
Al Howaish believes that institutions like his own are necessary to plug the gap between demand and supply. “The government's five-year plan for 2010 to 2015 posts one million new housing units, to be financed by its Real Estate Fund which provides loans to their citizens, and also by the newly founded Housing Commission. Apart from the units built by some ministries, mainly for their own employees, they expect 75 to 80% to come from private sector. But if we have to rely on individuals to meet this demand, it will not happen. We need to create organisations or companies to take responsibility for this. Currently, 85 to 90% of residential development is carried out by private players, whether individuals, developers or loan providers, who are not institutionalised.”
Our latest investment report on Kuwait was recently published in one of the leading Spanish dailies, ABC. FindMe in Kuwait explores the economic perspectives of Kuwait and the country´s future plans to compete with its fast developing neighbours. Once the leading country of the Gulf, Kuwait has remained silent for the past decade. And although many would like to see faster changes, Kuwait is moving, at its pace, to them. Inexorably. Learn about who is who in Kuwait and read what the leaders say about their own future in our upcoming release: FindMe in Kuwait Mobile app.
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