Stake, a fractional ownership firm, plans to finalize property deals worth 1 billion riyals ($266 million) in Saudi Arabia within six months. This move aims to attract growing interest from foreign investors eager to explore a once inaccessible market. By targeting these opportunities, Stake seeks to capitalize on the increasing global demand for entry into Saudi Arabia’s real estate sector.
According to Rami Tabbara, a co-founder of the Dubai-based digital platform, the company is currently paying 187 million riyals for a fully rented mall in Riyadh. It intends to pay 200 million riyals for a residential tower that would house more than 140 apartments.
Investors such as Saudi Aramco’s venture capital division and Abu Dubai sovereign wealth fund Mubadala Investment Co. support the company, which offers real estate investments starting at roughly $134.
He said that since its soft launch in the kingdom, Stake has seen “amazing demand” from investors looking to enter the market. “Investors want to participate because they see strong demand, capital appreciation, and high rental yields of as much as 7% to 8%,” Tabbara said.
On December 9, it will formally begin operations in the kingdom.
The largest economy in the Gulf is gradually opening its real estate market to overseas purchasers after long being restricted to outside investors. Although Saudi Arabia has begun to provide permanent residence to foreigners who purchase real estate valued at 4 million riyals, potential purchasers still do not have easy access to the market.
However, the prospect is attractive for individuals who want to invest in the emerging sector, where international corporations progressively set up offices and relocate employees. According to Knight Frank LLP, the value of apartments in Riyadh has increased by 62% over the last three years, while the cost of single-family homes, or villas, has risen by 37%.
The company said in a report last month that the kingdom will have to construct 115,000 homes annually for six years to meet the soaring demand from a largely young population as the government seeks to increase home ownership.
Saudi Arabia has announced significant expenditure and investment commitments to finance Crown Prince Mohammed bin Salman’s Vision 2030 initiative, which aims to diversify the economy away from oil. However, because oil prices are still considerably below what is required to balance the budget, the nation has begun scaling back some ambitious projects.
Since its inception in 2021, Stake has raised $28 million and purchased over 330 properties in Dubai worth around $150 million, according to Tabbara. According to its website, it has 832,000 users from over 200 nationalities.
It is planning to launch in Abu Dhabi early next year, Tabbara, the co-chief executive officer, said.
Stake pays investors rental income and requires a lock-in period of one year: “We ask investors to hold on for five years for real estate appreciation,” he said. “But for those that want to exit after one year, they’re able to do it on the platform by selling their stake to others.”
