Banks vying to fund Roshn’s Saudi expansion

• Interest in PIF-backed Roshn
• Turning away lenders
• Plan is backed by consortium

Saudi real estate developer Roshn, a subsidiary of the Public Investment Fund (PIF), is reporting strong interest from banks eager to finance its projects, and demand is so high that some lenders have been turned away, according to a senior executive.

In contrast to this momentum, Saudi Arabia’s other giga-projects face financing constraints, with resources increasingly redirected toward Riyadh to support the government’s successful bids for global events including the World Expo and Fifa World Cup. 

Fahad Al-Ghamdi, Roshn’s executive director of treasury and insurance, told AGBI that the Riyadh-based developer recently declined additional interest in its SAR9 billion ($2.4 billion) syndicated credit facility, announced in October to support its expansion. 

“Two years ago, GCC banks were a bit hesitant,” he said. “But now [most] wanted to participate in the same project. For the 9 billion deal, [many] banks wanted in, but we wanted to [set some interest] aside for a separate GCC-focused transaction.”

The facility, an unsecured revolving credit line, is backed by a consortium of Saudi-listed banks, including Saudi National Bank, Arab National Bank, Riyad Bank, Bank Albilad, Alinma Bank and Saudi Awwal Bank.

Roshn expects to raise SAR17 billion ($4.5 billion) domestically by year-end, while also tapping into international markets for additional funding next year, Al-Ghamdi said. 

The company also plans to secure a credit rating in 2025 to facilitate future issuances in the sukuk market and is considering asset monetisation to further support its financing strategy, he said.

“We don’t go to PIF [for] guarantees,” Al-Ghamdi said.

Al-Ghamdi said Roshn has built strong relationships with financial institutions as it completes major real estate developments across the kingdom, underscoring confidence in the company’s long-term potential.

Originally established to deliver 400,000 homes under Saudi Arabia’s Vision 2030 goal of reaching 70 percent homeownership, Roshn has helped the country come close, with homeownership at 64 percent in 2023.

• Former CEO sues Roshn for $100m over ‘unpaid bonuses’
• Roshn seeks contractors for Riyadh World Cup stadium
• PIF-backed Roshn raises $2.4bn for expansion

The developer has since diversified into commercial and retail projects and is now extending its focus to industrial and logistics parks.

Roshn is also working on two of the 11 stadiums planned for the 2034 Fifa World Cup, for which the kingdom is the only current bidder.

A Knight Frank report said Saudi Arabia will need to build 115,000 homes a year by 2030 to meet domestic housing demand. 

Real estate transactions in Saudi Arabia have totalled $168 billion so far this year, the Saudi minister of municipalities and housing, Majed Al Hogail, told a real estate forum in Riyadh this week.

While an initial public offering is part of Roshn’s long-term plan, Al-Ghamdi said the company is focused on building value first. 

“It’s all about timing,” he said. “Why should I go to an IPO now and say it’s cheap when I can go in three, four or five years?”