Saudi Arabia plans mega Mecca expansion to tap pilgrim gold rush
King Salman Gate is set to add praying areas, residential units, hotels and shops in an area spanning 12 million square metres
[DUBAI] Saudi Arabia plans to build a massive new development next to the Grand Mosque in Mecca as the kingdom seeks to modernise the holy city and accommodate millions more pilgrims each year.
King Salman Gate is set to add praying areas, residential units, hotels and shops in an area spanning 12 million square metres, or almost a quarter of the size of New York’s Manhattan.
The project is being developed by RUA AlHaram AlMakki, a unit of the Saudi sovereign wealth fund, according to the official Saudi Press Agency (SPA).
No details were provided on the estimated value of the project or timeline for construction, though the SPA said that the development is expected to add more than 300,000 jobs by 2036.
Saudi Arabia has been pouring money into building homes, hotels and commercial properties across both Mecca and Madinah as it aims to accommodate 30 million foreign worshippers a year by 2030. The cities have emerged as one of the most attractive destinations for investors and developers looking to capitalise on that momentum and serve demand from pilgrims and visitors.
Hotel operators and apartment owners can make sizeable returns because of the religious requirement for every able bodied Muslim to complete a Hajj pilgrimage once in a lifetime.
The kingdom has been loosening rules around foreign investment in Mecca and Madinah as it also seeks to draw in more international funding to drive development. Saudi Arabia is in the process of updating rules for property ownership by non-Saudis in areas in Riyadh and Jeddah, though special requirements are to remain in the holy cities, according to the SPA.
Madinah surpassed Riyadh and Mecca in the first half of this year to become Saudi Arabia’s top housing market, according to real estate consultancy Knight Frank. The city has seen a surge in demand as some buyers rush to secure homes before foreign investors potentially enter the market, it said. BLOOMBERG
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