Saudi Mortgage Refinance Company's Sukuk Highly Oversubscribed

A Saudi state-owned mortgage refinancing company attracted nearly seven times the amount it sought from investors in its latest international sukuk issuance, highlighting strong demand for government-backed debt in the kingdom.

Orders for Saudi Real Estate Refinance Company’s (SRC) $2.75 billion global sukuk reached $18.7 billion, Bahrain-based Al Salam Bank, joint lead manager and bookrunner, said in a statement. The issuance is “the largest international US dollar-denominated GCC sukuk of 2026”, the bank said.

In November last year, Public Investment Fund-owned SRC signed an agreement to buy two mortgage portfolios from Al Rajhi Bank for SAR10 billion ($2.7 billion). A mortgage-backed securities deal lets banks sell home loans to investors, freeing cash to issue more mortgages and expand credit in the economy.

The deal was aimed at enhancing liquidity for financing institutions and increasing homeownership among Saudi families. The government’s Vision 2030 development plan aims to raise homeownership among Saudis to 70 percent by the end of the decade. The country said it had surpassed 66 percent at the end of 2025.

In its second-quarter 2026 review of the real estate market, global consultancy CBRE said residential transaction values across Saudi Arabia fell 27 percent year on year to SAR38 billion, as deal counts declined by 14 percent between April and June. Public entities such as the Real Estate Development Fund offered subsidies to help sustain end-user purchasing power and support long-term market stability, the report said.

For a developer: The oversubscription of SRC's sukuk indicates a robust appetite for investment in Saudi Arabia's real estate sector, suggesting a favorable environment for future development projects. The government's initiatives to enhance liquidity and increase homeownership align with the Vision 2030 goals, potentially leading to increased opportunities for developers and investors in the housing market.