Despite continued growth in the size of the global private debt market, the Middle East has long lagged behind, relying on commercial banks as the main source of lending for real estate developers and investors. Despite continued growth in the size of the global private debt market, the Middle East has long lagged behind, relying on commercial banks as the main source of lending to real estate developers and investors.
<The new report, titled Traditional Business Finance: Opportunities for the Private Real Estate Debt Market in the UAE and Saudi Arabia,“ highlights how diversification of debt sources and alternative financing structures can support competition for lending, thereby injecting new capital into the real estate market.
The new report, titled ”Traditional Business Finance. <The report highlighted two key benefits of private debt: First, to provide financing for smaller borrowers without a long history who currently struggle to obtain traditional bank loans without high levels of collateral, and second, to enhance the flexibility of loan terms for all borrowers.
The report noted two key benefits of private debt: first, it provides financing for smaller borrowers without a long history who currently struggle to obtain traditional bank loans without high levels of collateral. Given the constraints on lending terms from commercial banks in previous periods, it is reasonable to assume that private debt providers will account for 10% of the total real estate debt market within the next decade.
In 2017, the total real estate debt market reached 10%. <In 2017, total bank lending to the UAE's real estate and construction sector reached $81 billion (AED 300 billion).
JLL estimates that approximately 10% of the $51 billion in private debt was raised outside of global markets.
JLL estimates that approximately 10% of the $51 billion in private debt was raised outside of global markets.
