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SRC and Public Pension Agency sign SAR 3 billion portfolio acquisition agreement to provide liquidity to real estate financing market
July 2020

SRC and Public Pension Agency sign SAR 3 billion portfolio acquisition agreement to provide liquidity to real estate financing market

Riyadh, Saudi Arabia; 19 July 2020:

Saudi Real Estate Refinance Company (SRC), a subsidiary of Saudi Arabia’s Public Investment Fund (PIF), has signed an agreement with the Public Pension Agency (PPA) to acquire mortgage portfolio worth more than SAR 3 billion, the largest ever housing real estate refinancing transaction and first-of-its-kind in the Kingdom.

“The landmark transaction with SRC facilitates the achievement of the Masakin Programme’s strategic objectives, as well as shows our commitment to the citizens by being innovative and ensuring that homeownership rates in the Kingdom are improved to support the Vision 2030. This agreement will help the liquidity in the market and help us provide more mortgages to people to buy homes,” His Excellency Mohammed Al Nahhas, Governor of PPA said.

“The agreement represents a significant portion of the Masakin Programme, a PPA sponsored initiative that provides fixed-rate Murabaha home financing solutions to employees and pensioners from PPA and the General Organisation for Social Insurance (GOSI), with an aim to encourage homeownership in the Kingdom. The Masakin Programme has contributed to the financing of over 9,000 contracts during the last decade.” His Excellency the Governor added.

“The scale and magnitude of our agreement with PPA enunciates our commitment to exploring different avenues to help the citizens of Saudi Arabia climb the housing ladder. The deal provides liquidity to the real estate financing market, which in turn is expected to bring lower prices and increase the number of mortgage originations – leading to SRC’s goal of improving homeownership rates in the Kingdom,” Fabrice Susini, CEO of SRC said.

“The agreement provides the mortgage financing industry an opportunity to refinance their assets, that would otherwise be sitting in their books for a decade or two, by offloading mortgage portfolios to SRC. Such an avenue is expected to make the real estate financing market in the Kingdom attractive to investors. We encourage industry participants to get in touch with us to explore liquidating real estate mortgage assets in their books, and continue to originate more mortgages, thereby improving the overall real estate financing industry and homeownership in the Kingdom.” Susini added.

“The SRC-PPA agreement reinforces the DAT’s robust management of the Masakin Programme over the last decade and reinstates the programme’s stature as one of the most successful real estate financing regimes in the Kingdom. We will continue to strive towards the utmost standard regarding the management of this programme as we look to increase homeownership rates among Saudi citizens, as well as continue to the develop our existing partnership with the PPA.” Ghassan Al Amoudi, CEO of DAT, said.

With the landmark transaction, SRC, which started in 2017 with a goal of improving the real estate financing industry in Saudi Arabia, has now become the major acquirer of real estate portfolios in the Kingdom, having acquired portfolios from Banks, Mortgage Finance Companies and NBFIs.

SRC’s goal is to deploy more than SAR 20 billion, mainly through purchasing mortgage portfolios with an aim to refinance 10% of the home loans this year.



About Dar Al Tamleek (DAT):

Dar Al Tamleek is a specialized mortgage company that started operations in 2008 with a common vision to become the Kingdom's leading expert in home financing solutions.  Since that time, Dar Al Tamleek has become the largest mortgage company in the Kingdom and has helped over 70,000 family members realize their dream of home ownership.

Our primary business is providing program management services for third parties that are looking to deploy capital into the Saudi mortgage sector.  Technology is a core competency with our proprietary contract origination system (COS) allowing for rapid implementation of new program management arrangements that allow specific product, customer, and geographic targeting based on partner requirements. 

The company operates in the Kingdom’s major cities of Riyadh, Jeddah, and Dammam along with 24 other locations to better serve over 90% of the population.

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About Saudi Real Estate Refinance Company (SRC):

Fully owned by the Public investment fund (PIF), the Saudi Real Estate Refinance Company (SRC) was established in 2017 with the goal to help transform the local housing market.

SRC enables originators to increase the origination of long-term fixed-rate (LTFR) mortgages that in turn provide consumers with a high degree of predictability and protection from potential interest rate increases. As one of its primary roles, SRC offers lenders funding to provide liquidity or capital relief, enabling growth in the home finance sector to increase home ownership rates among Saudi citizens. SRC will subsequently aggregate and packages mortgage portfolios into mortgage backed securities to be sold to domestic and international investors.

SRC is licensed to operate in the secondary real estate market by the Saudi Arabian Monetary Authority (SAMA). With a world class management team drawing from international best practice, SRC is uniquely positioned to become the partner of choice for lenders in the Kingdom.

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