investment 16
Below: Abraj al-Bait
about US$2.6 billion. “There are big plans – they plan to enlarge On an even larger scale, the local Jiwar Real Estate
the surroundings of the Ka’ba,” El-Amine adds. “The government Management, Marketing and Development Company
has acquired land from the previous owners, and is establishing a announced plans late last year to build 21 towers within a few
number of mixed-use projects incorporating hotels, commercial hundred metres of the Masjid al-Haram. The US$5.8 billion
centres and residential units.” The government is estimated to Rawabi Abraj al-Bait project, which has been designed by Dar
have paid between US$13,000 to US$67,000 per square metre al-Handasah, will feature towers of between 25 to 65 floors.
in compensation to the owners of the properties that have been, The project will cover 2.8 million square metres and will be sold
or will be, demolished to make way for the planned expansion. in blocks of five towers; and is mainly intended as serviced
The owners of the properties acquired for the planned Haram apartments for visiting pilgrims. Saudi Binladin, which owns
Library can expect over US$213 million in compensation from the Jiwar, will carry out the construction work, which is expected to
Makkah Chamber of Commerce & Industry. take five years to complete.
Investment opportunities are tempered, however, by the The investment opportunities are not restricted to those
stringent regulations in Saudi Arabia. According to Imad Damrah, properties in the shadow of the Masjid al-Haram. Related
Colliers International’s country director for Saudi Arabia, the projects, designed to tie-in with the broader Makkah
opportunities for non-Saudi nationals are limited. “Saudi Arabia’s redevelopment plan are also underway. Tareeq al-Mawazee is
market is not as open to foreign ownership compared to the a one-million-square-metre urban regeneration project which
UAE, for example. A foreigner residing in the country is allowed will encompass a critically-needed three kilometre-long, four-
to own properties for personal residential purpose only whereby lane road to enhance connectivity and reduce traffic congestion
ownership is constrained by the approval issued by the Ministry in Makkah. Moreover, it will also feature mixed-use real estate
of Interior,” he says. “In addition, the property must be held for developments consisting of residential, commercial, retail
five years before it can be resold – a regulation aimed at curbing and hospitality components which will improve facilities for
speculative buying interest. Furthermore, non-Saudi nationals residents and pilgrims. It is expected to be completed in 2018
cannot own properties in Makkah and Madinah unless through and will be jointly developed by Dallah al-Baraka and the Saudi
inheritance,” he adds. Binladin Group. Riyadh-based Dallah al-Baraka plans to raise
US$5.6 billion for the scheme by selling shares in a new project
company. It is currently awaiting approval from the Makkah
authorities to set up the company, which it is expecting to
One of the seven towers at Abraj al-Bait is
receive in the first half of 2009.
expected to reach 595 metres in height, which
Among the other key projects planned for the city is the
Al-Shamiyah redevelopment. The US$13.5 billion project is
will make it the tallest building in the Kingdom
a 1.5-square-kilometre urban regeneration scheme running
from the Grand Mosque to beyond the second ring road to the
north of the city, and from Holy Mosque street in the east to
Jabal al-Qaaba road in the west. Developed by a consortium led
by the local Al-Oula Group, Al-Shamiyah is the one remaining
area in Makkah’s central district that has not been subject to
redevelopment efforts by the public or private sectors. It is due to
be completed in 10 years and will feature a series of hotels, along
with residential and commercial buildings.
With some of the world’s most expensive real estate, and
a guaranteed influx of pilgrims in their millions – and growing
every year – it is little surprise that Saudi Arabia is undertaking
such exciting projects. What is key is that the government
ensures the future prosperity of Makkah while adhering to the
tenets of Islam at every level.
t
Makkah real estate developers
Jabal Khandama Development Company – Jabal Khandama
Jabal Omar Development Company – Jabal Omar
Al-Oula Development Company – Al-Shamiya
The Al-Hijra Company for Real Estate – Dharb al-Khalil
Saudi Binladin Group – Rawabi Abraj al-Bait
Abdul Latif Jameel Real Estate Investment – Jabal al-Ka’ba
Sheikh Suleiman al-Rahji Company – Royal Eskan
Source: Colliers International 2008
PREVIEW Cityscape Saudi Arabia
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