Dubai-based digital platform offers $134 entry into Saudi real estate market
A general view of Riyadh. Long closed to outside investors, the Gulf’s largest economy is slowly opening its property sector to foreign buyers.
The Dubai-based digital platform is already in the process of acquiring a fully-rented mall in Riyadh for 187mn riyals and plans to buy a residential tower with more than 140 apartments for 200mn riyals, its co-founder Rami Tabbara said in an interview.
The firm, which facilitates property investments starting at about $134, is backed by investors including Abu Dubai sovereign wealth fund Mubadala Investment Co and Saudi Aramco’s venture capital arm.
Since its soft launch in the kingdom, Stake has seen “amazing demand” from investors looking to enter the market, he said. “Investors want to participate because they see strong demand, capital appreciation and high rental yields of as much as 7% to 8%,” Tabbara said.
Long closed to outside investors, the Gulf’s largest economy is slowly opening its property sector to foreign buyers. While Saudi Arabia started granting foreigners who buy property worth 4mn riyals a long-term residency, prospective buyers are yet to get easy access to the market.
But for those looking to invest in the nascent market where multinationals are increasingly opening up offices and moving staff, the opportunity is appealing. In Riyadh, apartment values have surged 62% in the past three years, while prices of single family homes, known as villas, climbed 37%, according to Knight Frank LLP.
The kingdom will need to build 115,000 homes each year for the next six years to fulfil surging demand from a predominately young population as the government aims to boost homeownership, the company said in a report last month.
Saudi Arabia has outlined massive investment and spending commitments to fund Crown Prince Mohammed bin Salman’s Vision 2030 agenda to diversify the economy away from oil. However, the country has started to scale back some of its ambitious projects, in part because oil prices remain far below what’s needed to balance the budget.
Since its inception in 2021, Stake has raised $28mn and purchased over 330 properties in Dubai worth around $150mn, according to Tabbara. It has 832,000 users from over 200 nationalities, according to its website.
It is planning to launch in Abu Dhabi early next year, Tabbara, who’s also 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.”
link
