Saudi Arabia Opens Investment in Real Estate Companies in Makkah and Madina to Foreigners
Riyadh – Saudi Arabia’s market regulator announced on Monday that foreign investors will now be allowed to invest in publicly listed companies owning real estate in Makkah and Madina, the two holiest cities in Islam. The move is part of the kingdom’s broader strategy to attract foreign capital and diversify its economy.
The Capital Market Authority (CMA) said the decision aims to provide greater liquidity for ongoing and future projects in Makkah and Madina, where revenues are heavily reliant on pilgrimage-related activities. This aligns with Saudi Arabia’s Vision 2030 reform agenda, which seeks to reduce the kingdom’s dependence on oil revenues and boost other sectors of the economy.
Saudi Arabia plans to welcome 30 million pilgrims annually for Hajj and Umrah by 2030. In 2019, pilgrimage activities generated approximately $12 billion in revenue, underscoring their vital role in the economy.
The decision positively impacted the stock market, with shares of companies owning real estate in Makkah, such as Jabal Omar Development Company and Makkah Construction and Development Company, surging by 10%.
The CMA clarified that foreign investments would be restricted to shares, convertible debt instruments, or both, and would exclude “strategic foreign investors.” Additionally, non-Saudis cannot own more than 49% of the shares in the companies involved.
In 2021, the Saudi government allowed non-Saudis to invest in real estate funds within the boundaries of Makkah and Madina. The latest move builds on these efforts, reflecting the kingdom’s commitment to attracting international funds and expanding investment opportunities.
Saudi Arabia’s stock market, the largest in the Gulf region with a market capitalization of 10.2 trillion riyals ($2.72 trillion), has been open to foreign investors since 2015 and has experienced a surge in listings in recent years.
By opening up to foreign investment in Makkah and Madina, the kingdom hopes to enhance infrastructure, accommodate a growing number of pilgrims, and further cement its economic transformation goals under Vision 2030.
