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Saudi Opens Holy Cities to Foreign Investors
18 Mar
Summary
- A $1.2 billion real estate fund is planned for Mecca and Madinah.
- Foreign buyers are expected to drive prices up significantly.
- Property prices in holy cities could reach 50,000 riyals per square meter.
A significant real estate development initiative is underway in Saudi Arabia's holy cities of Mecca and Madinah. Arabian Dyar and Al Rajhi Capital are establishing a 4.5 billion riyals ($1.2 billion) fund to develop high-quality properties near the sacred mosques. This fund, initially valued at 4.5 billion riyals, is projected to grow to as much as 20 billion riyals in future phases.
The initiative aims to construct thousands of residential units, shops, and hotels to meet a surge in foreign investor interest. Arabian Dyar's CEO, Naif Alatawi, stated that the holy cities are considered stable investment destinations. The Saudi government's decision to allow foreign ownership, particularly for overseas Muslim buyers in Mecca and Madinah, is a key driver for this market opening.
Arabian Dyar is already involved in major projects in Mecca, including the Masar development. The company plans to build 13 towers featuring 4,000 apartments and 150 hotel rooms. As the market opens, property prices are expected to increase substantially, with projections suggesting they could reach 50,000 riyals per square meter, up from current averages around 35,000 riyals per square meter for properties sold previously.
