Real Estate

Property app Stake to launch in Saudi Arabia

December 6, 2024, 6:29 PM

Property app Stake says it is close to acquiring a fully-rented mall and a 140-apartment tower in Riyadh

Fractional-ownership platform
Startup on third funding round
10.3% investor return in 2023

A fractional-ownership platform that enables investors to own parcels of real estate for as little as SAR500 ($134) is to launch in Saudi Arabia on December 9.

Based in Dubai, Stake offers investors the opportunity to buy parts of residential and commercial properties.

Fractional property ownership is a rising trend in the global real estate market. It allows investors to join through a special purpose vehicle and buy shares of one or more properties for far less than they would spend on purchasing a property individually.

Stake, which gave a 10.3 percent average investor return in 2023, is offering two funds for investors in Saudi Arabia – buy to lease and buy to sell. Users are expected to stay for at least one year, after which they can sell to others or remain in the fund until it matures.

Rami Tabbara, Stake’s co-founder and co-CEO, told Bloomberg that the company is close to acquiring a fully-rented mall in Riyadh for SAR187 million ($49 million) and a residential tower with more than 140 apartments for SAR200 million ($53 million).

He said interest from Saudi investors has been high. “They want to participate because they see strong demand, capital appreciation and high rental yields, of as much as 7 percent to 8 percent.”

Residential real-estate prices and rents have continued to soar this year in Saudi Arabia, JLL KSA said in its half-year report.

Year-on-year sales prices in Riyadh and Jeddah have jumped by 10 percent and 5 percent respectively, while rental yields also remain high, with a year-on-year growth of 9 percent in Riyadh and 4 percent in Jeddah.

In June, Stake raised $14 million in a Series A funding round, led by MEVP Middle East Venture Partners, along with Aramco’s Wa’ed Ventures, Mubadala and Republic, a US-based private investing platform.

It was the startup’s third funding round after seed and pre-series A rounds earlier on. Since its launch in 2021, Stake has sold more than 330 properties worth AED550 million ($150 million) via its app.

Investment and research platform Wamda said property technology had emerged as a favourite with investors this year, attracting $200 million across 14 deals, replacing fintech as the most funded sector.