Dyar, Al Rajhi wager on the holy sites: Arabian Dyar and Al Rajhi Capital are launching an SAR 4.5 bn real estate fund to develop “high-quality” residential and hospitality projects in Makkah and Madinah, Arabian Dyar said in a statement.

Who’s doing what? The Haramain Projects Fund will see Al Rajhi Capital finance projects, while Arabian Dyar will be responsible for the development and selling processes, Arabian Dyar CEO Naif Alatawi told Bloomberg.

The pitch: The fund is designed to significantly increase the real estate supply in the area surrounding the Two Holy Mosques, targeting the creation of thousands of new units. “The current property supply in Mecca is very limited as most projects are just starting. Prices could hit SAR 50k per sqm when the market opens,” Alatawi added.

The supply is meant to meet the expected new demand from non-Saudi Muslims, who can now own property in Makkah and Madinah under the Real Estate Foreign Ownership Law, which went into effect last January.

Just a start: Alatawi says the fund could eventually deploy up to SAR 20 bn to meet the projected surge in foreign demand. The company is already working on SAR 10 bn worth of projects in Makkah’s Masar district, including 13 towers and 4k apartments, Alatawi said.

Dyar is not worried about the regional turbulence: “The demand is strong for the holy cities even in the current circumstances. These cities are seen as stable investment destinations that have stood there for centuries,” Alatawi argued.

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