CMA, REGA say real estate contributions ‘new financing channel’

Abdullah Binghannam, Deputy, Listed Companies and Investment Products at the Capital Market Authority (CMA), stressed that the Real Estate Contributions Law, which will take effect next November, will support the existing laws and legislations, and better regulate the real estate activities.

The Cabinet’s endorsement of the Real Estate Contributions Law is a key step in the real estate investment, as the new law boosts financing and investment channels in parallel with real estate investment funds. It also enhances protection of investors in the real estate sector against unlicensed practices.

Binghannam added the real estate investment traded funds (REITs) overseen by the CMA witnessed an increase in the number of subscribers in the last few years to 527,000 in 356 REITs. Assets under management exceeded SAR 167 billion.

He also cited the role of governance through the relevant executive regulations, which govern the offer of securities and continuing obligations.

The CMA will continue to enable REITs, as a key financing and investment channel in the real estate sector, whether in initial or constructional development, or income generating funds, Binghannam stressed.

Elsewhere, the Real Estate General Authority's (REGA) Spokesperson, Tayseer Al-Mufarrej, said the new law aims to regulate real estate contributions, enhance transparency and disclosure levels. It also protects the rights of all parties to a real estate contribution, opens new financing channels for investors in the real estate development industry and enhances confidence in the sector. The law will also contribute to increasing supply of developed real estate products, which enhances the market and fulfills growing demand especially in the residential sector.

Through this law, REGA seeks to regulate the real estate contributions activity, governance of licensing, classification of real estate contributions, and qualification of real estate developers, Al-Mufarrej added.

Source: Argaam