Having a mortgage law before the end of this year will make buying property in Saudi Arabia easier, according to Abdul Latif Al Salash, CEO of the Riyadh-based Dar Al-Arkan Real Estate Company.

"Our Finance Minister Ibrahim Al Assaf has confirmed that a draft mortgage law is in place. We expect the law to be enacted sometime this year," Al Salash told Arab News in London, where a roadshow for the international debut of corporate Sukuk - a 3-year $425 million Sukuk Al-Ijara - issued on behalf of Dar Al-Arkan concluded recently.

The roadshow, held at the London headquarters of WestLB, one of the joint lead managers and bookrunners for the issuance, attracted many bankers and institutional investors.

"The government has realised that its role in financing housing is limited and that the private sector should assume a greater role in this respect. Banks in Saudi Arabia are very keen to provide consumer housing financing. This law will pave the way for the mortgage industry in the Kingdom," Al Salash explained.

He said that housing financing is a very contentious issue in the Kingdom at present, but stressed that the government is keen to get the necessary legislations through in the course of 2007.

The financial close for the offering is February 15, 2007, and according to the five joint lead managers and bookrunners - Bahrain-based ABC Islamic Bank, Arab National Bank in Saudi Arabia, Standard Bank of South Africa (London Branch), Bahrain-based Unicorn Investment Bank, and WestLB of German (London Branch), the roadshows have been very successful with several investors showing interest in the issuance.

Al Salash said that the company is in the process of setting up a housing finance joint venture company in which Dar Al-Arkan will have a 15 per cent stake; the International Finance Corporation (IFC), the private sector funding arm of the World Bank Group will have a five percent stake, Arab National Bank and Kingdom Installments Company (KIC) will share the remaining equity. This joint venture is set to become the first such housing finance company to be licensed by SAMA (the Saudi Arabian Monetary Agency).