Indonesia’s sovereign fund commits SAR 6 bn to Makkah hotels and retail

Saudi Arabia opened its holy cities to foreign property money in June and now it has its first sovereign-scale taker. Indonesia’s Danantara is committing more than SAR 6 bn to Makkah, buying a hotel, 14 plots, and earmarking most of the money for new hospitality and retail, Al Khumasia Group CEO Ammar Barom — Danantara’s local development partner in the Kingdom — told Asharq Business.

The assets all sit in the Thakher Makkah project, developed by Thakher Development: the Novotel Makkah Thakher hotel, and 14 plots zoned for hotel and commercial use.

The money splits three ways: around SAR 1 bn for the hotel, more than SAR 1 bn for the land, and some SAR 4 bn for development, Barom said. Danantara and Al Khumasia are building roughly 4.7k hotel rooms, a commercial complex, and support facilities across nearly 44k sqm, with a plan to scale up to around 6k rooms and a mall of more than 90 stores.

The commitment builds on a December 2025 agreement between Danantara Investment Management, the fund’s investment arm, and Thakher Development to acquire the Novotel Makkah Thakher City and the 14 plots. Danantara is developing the land under a plan spanning hospitality, retail, and support services, the two said at the time.

Why it matters: This is a long bet on the pilgrim economy, one of the few demand streams in Saudi real estate that doesn’t follow the property cycle. Indonesia alone sends more than 2 mn Umrah pilgrims and upwards of 200k for Hajj to the Kingdom each year. And a foreign sovereign fund committing bns to Makkah while Houthi projectiles are still reaching Saudi territory tells shows insulated investors judge the holy-city market to be. It also hands the Kingdom’s new foreign-ownership regime its first sovereign-scale proof of concept.

The investment comes months after the rules opened the door. The Cabinet approved the executive regulations and geographic zones for non-Saudi ownership in June, with Makkah among the listed cities and ownership there restricted to Muslim buyers. Appetite was already showing with Alramz Real Estate’s Masar Corner project in Makkah drawing some SAR 670 mn in preliminary off-plan reservations on launch day earlier this month from buyers in 51 countries.

The Holy Cities’ real estate remains attractive despite the disruptions, with Indonesia’s Danantara investing over SAR 6 bn in Makkah, acquiring a hotel and land plots, CEO of Al Khumasia Group, Danantara’s local development partner, Ammar Barom told Asharq Business. They include Novotel Makkah Thakher hotel and 14 plots in the Thakher Makkah project, developed by Thakher Development, earmarked for hotel and commercial projects.