Saudi Arabia’s Jadwa launches $66.6m fund to invest in property market

Al Shorfa Investment Fund aims to develop multiple commercial complexes in Riyadh and Jeddah

The Riyadh skyline. The Al Shorfa Fund is part of a series of real estate development funds that Jadwa launched this year. Photo: Reuters

Saudi Arabian asset management and advisory company Jadwa Investment has set up a property fund worth 250 million Saudi riyals ($66.6m) to invest in the development of multiple commercial complexes in Riyadh and Jeddah, as it seeks to capitalise on the growing demand for property in the kingdom.

Al Shorfa Investment Fund is a Sharia-compliant real estate investment vehicle, with an expected term of five years, Jadwa said on Wednesday.

Jadwa, which set up the closed-end investment vehicle in partnership with First Avenue For Real Estate Development Company, manages assets worth 35 billion riyals.

“Al Shorfa Investment Fund will be of particular interest to investors interested in premier real estate assets across Riyadh and Jeddah,” said Tariq Al-Sudairy, managing director and chief executive of Jadwa Investment.

Saudi Arabia is focused on diversifying the economy under its Vision 2030 programme that aims to develop local industries and cut its dependence on hydrocarbons.

The kingdom plans to turn Riyadh into one of the top 10 city-economies in the world. It is investing $220bn to transform the capital and expects to attract a similar level of investment from the private sector, according to Fahd Al Rasheed, president of the Royal Commission for Riyadh City.

Nearly 330,000 square metres of gross leasable office space were delivered in Riyadh over the third quarter this year, said global real estate consultancy JLL. Meanwhile, in Jeddah, only 40,600 square metres of office stock was added in the same period, JLL reported.

The majority of upcoming stock in both the cities is Grade A floor space, according to the consultancy. Demand was strongest from the government and banking sectors, which broadly aimed at large floor spaces in Riyadh, JLL said.

“Our partnership with Jadwa Investment in Al Shorfa Fund aspires to provide investors with access to premium real estate projects … and to develop standard-setting properties for the kingdom’s real estate market,” said Nader Al Amri, chief executive of First Avenue For Real Estate Development Company.

Jadwa Investment will serve as the fund manager while First Avenue For Real Estate Development Company will be the development partner, the statement said.

Al Shorfa Fund has acquired three assets to date, said Jadwa. This is part of a series of real estate development funds that Jadwa launched this year.

In April, Jadwa set up a property fund worth 1bn riyals to develop prime residential projects in the kingdom. Al Dar Investment Fund will develop more than 1,500 residential units in Riyadh, through several apartment complexes aimed at medium- to high-income households.