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Dubai-based fractional ownership platform Stake is planning to invest SAR 1 bn in Saudi’s real estate market over the next 6 months, Bloomberg reports. Backed by Mubadala Investment and Saudi Aramco’s Wa’ed Ventures, the company aims to capitalize on growing interest from foreign investors. The company will officially kick off operations in the Kingdom tomorrow.
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What’s Stake? The proptech company allows users to co-invest in real estate properties starting at USD 134 — investors earn rental income. Investors face a one-year lock-in period, after which they can sell their stake or hold on to it to allow it to appreciate. Stake raised USD 28 mn since it was founded in 2021, the latest funds — a USD 14 mn series A funding round — were said to be used to fuel its expansion into the Saudi market. During its four years of operations, the company has purchased properties worth around USD 150 mn in Dubai, co-founder Rami Tabbara told Bloomberg. The startup has 832K users from over 200 counties.
The pipeline: Stake is currently working to acquire a fully rented mall in Riyadh for SAR 187 mn. It also plans to purchase a 140-apartment residential tower for SAR 200 mn, Tabbara said.
What they said: Since its soft launch in the Kingdom, Stake has seen “amazing demand” from investors, “because they see strong demand, capital appreciation and high rental yields of as much as 7% to 8%,” Tabbara said. The domestic real estate market needs to add 115k homes a year in the next six years to meet rising demand, according to Knight Frank.
The domestic market offers higher yields compared to its peers: Jeddah topped regional apartment rental yields in 3Q 2024, with a 2-bedroom unit averaging 11.7%. That’s nearly double average apartment yields in Doha, Dubai, and Abu Dhabi, which ranged between 5-6%. In Riyadh, apartment yields were similarly high, ranging between 9.1-11.5%, while Dammam (6.2-6.6%) and Khobar (5.3-7.4%) yields are closer to regional averages.
