The Saudi PIF backed developer Umm Al Qura for Development and Construction is due to launch an IPO to support its much anticipated $26.6 billion MASAR Makkah project.
The move comes immediately after the Saudi government allowed foreigners to invest in publicly listed Real Estated companies in the Holy Cities of Makkah and Madinah.
This IPO is intended to help fund its MASAR Makkah project which aims to transform the skyline of Makkah, extending from the Haramain Railway station to The Grand Mosque, Al Masjid Al Haram.
Launch of Umm Al Qura’s IPO
The Saudi Arabian real estate landscape is set for a significant shift as Umm Al Qura for Development and Construction, a prominent developer backed by the Public Investment Fund (PIF), advances its plans for an initial public offering (IPO).
The announcement comes at a pivotal moment, following the Saudi government’s decision to open doors for foreign investment in publicly listed real estate companies within the holy cities of Makkah and Madinah.
Umm Al Qura’s initiative to go public represents a watershed moment in Saudi Arabia’s economic diversification efforts and aligns seamlessly with the kingdom’s Vision 2030 objectives.
The Path to Umm Al Qura’s IPO
The journey towards Umm Al Qura’s public offering has been marked by a series of crucial regulatory milestones. The Saudi Capital Market Authority (CMA) granted its approval on December 24, 2024, allowing the company to register its share capital and offer a substantial portion of its equity to the public.
The IPO structure involves the issuance of 130,786,142 new shares, which will represent 9.09% of Umm Al Qura’s enlarged capital post-offering.
Further cementing the path to listing, the Saudi Exchange provided conditional approval on December 8, 2024, for Umm Al Qura’s shares to be traded on the Tadawul Main Market.
This dual approval from both the CMA and the Saudi Exchange underscores the regulatory confidence in Umm Al Qura’s corporate governance and financial health.
MASAR Makkah Project
At the heart of Umm Al Qura’s ambitious plans lies the MASAR project, a visionary urban development set to redefine Makkah’s cityscape.
Strategically positioned only 550 meters from the Holy Mosque and 100 meters from the Haramain Station, it will span 3.5 kilometers along the western border of Makkah. MASAR Makkah covers approximately 641,000 square meters, with a total gross floor area (GFA) of 5.7 million square meters.
MASAR’s architectural concept blends modern design with traditional Islamic aesthetics, creating a harmonious urban environment that respects Makkah’s spiritual significance.
The project features a mix of low-rise and high-rise structures, with careful consideration given to sight lines and the visual impact on the holy sites.
Residential and Hospitality Components
The centerpiece of this project is the Residential Towers, which showcase the ambitious vision of Masar Destination.
In September 2023, Umm Al-Qura announced a collaboration with Scope Properties to construct Residential Towers in Makkah, a project worth $240 Million (SAR900 million).
Upon completion, MASAR will offer more than 50,000 hospitality and residential units, catering to a diverse range of needs and preferences and it will feature 41,000 rooms total in hotels, apartments, and 9,000 residential units for sale.
The residential offerings will include apartments, villas, and serviced residences designed to accommodate both permanent residents and pilgrims seeking extended stays.
Retail and Commercial Spaces
MASAR’s commercial strategy includes the development of extensive retail spaces, creating a vibrant shopping and dining destination. The retail offerings will cater to both local residents and international visitors, featuring a mix of global brands and local businesses.
Office spaces within the development will provide modern work environments for businesses looking to establish a presence in Makkah. These commercial areas are designed to support the growth of the local economy and create employment opportunities for residents.
Infrastructure and Public Amenities
A key component of the MASAR project is the development of state-of-the-art infrastructure to support the needs of residents and visitors. This includes advanced transportation systems, utilities, and telecommunications networks designed to handle the high-density urban environment.
Public amenities planned for MASAR include a large central mosque, healthcare facilities, educational institutions, and cultural centers. These amenities aim to create a self-contained community that enhances the quality of life for residents and provides comprehensive services for pilgrims.
Financial Advisors and Underwriters
To handle the complexities of going public, Umm Al Qura has assembled a team of financial institutions to guide the IPO process. Albilad Capital has been appointed as the joint financial advisor, lead manager, bookrunner, and underwriter, bringing its extensive experience in the Saudi capital markets to bear.
GIB Capital and AlRajhi Capital will serve in multiple capacities, including as joint financial advisors, bookrunners, and underwriters. Additionally, Alinma Invest has been brought on board as a joint bookrunner and underwriter, rounding out the team of financial institutions supporting the IPO.
The company has also enlisted the services of Lazard for financial advisory and FGS Global for media and communications support, ensuring a comprehensive approach to investor relations and public messaging throughout the IPO process.
IPO Funding Allocation
Umm Al Qura has delineated specific areas where the IPO funds will be channeled:
- Land Settlements: Acquiring and consolidating land parcels necessary for the project’s expansive footprint.
- Infrastructure Development: Laying the groundwork for utilities, transportation networks, and public spaces.
- Project Activation: Initiating key components of MASAR to kickstart the development’s functionality.
- Financing Expenditures: Managing debt and optimizing the capital structure for long-term sustainability.
Supporting Saudi Vision 2030
MASAR plays a crucial role in supporting Saudi Arabia’s Vision 2030 objective of increasing the kingdom’s capacity to host Umrah visitors from 8 million to 30 million annually.
The project’s extensive hospitality offerings and improved infrastructure are designed to accommodate this significant growth in visitor numbers while enhancing the overall pilgrimage experience.
By providing modern, comfortable accommodations and efficient transportation links, MASAR aims to make the pilgrimage journey more accessible and enjoyable for visitors from around the world.
Shaping Real Estate in Makkah
As Umm Al Qura prepares for its IPO and advances the MASAR project, the company’s future trajectory holds significant promise.
Looking beyond the immediate horizon of the public offering and initial project phases, Umm Al Qura is poised for potential growth and expansion that could further cement its position in Saudi Arabia’s real estate and development landscape.
More Redefining Projects in Makkah
Jabal Omar Development
The Jabal Omar Development Project, an 8 Billion SAR project, is a one-of-a-kind initiative focused on revitalizing the urban area to offer high-quality lodging and facilitate religious, social, and business amenities and resources for both tourists and inhabitants of the sacred city of Makkah Al-Mukarramah.
By 2030, Jabal Omar Development Company plans to run 15 hotels across 230,000 square meters of area. These hotels will offer a direct view of Al Masjid Al Haram, providing guests with a convenient and spiritually enriching experience.
Jumeirah Jabal Omar Hotel
The Jumeirah Jabal Omar Hotel in the Holy City of Makkah, the first hotel in Saudi Arabia by the Jumeirah Hotel group from Dubai, has been officially announced to be open.
Located in the second phase of the Jabal Omar development, the hotel is positioned in the heart of Jabal Omar near the Grand Mosque, Al Masjid Al Haram.
Featuring more than 1000 rooms and suites, some offering direct views of the haram, the hotel strives to provide extraordinary experiences to pilgrims on their Hajj and Umrah journeys.
Address Hotel Jabal Omar
The 5-star Address Jabal Omar Makkah Hotel provides a luxurious stay, dining options, and other amenities, making it a spiritual sanctuary in the center of Makkah. Just 1640 feet from Masjid Al Haram, the hotel offers a fitness center, private parking, a shared lounge, and a restaurant for its guests.
The 5-star Address Hotel in Jabal Omar Makkah has also revealed Sky Musallah, the highest prayer room in the world, located within a sky bridge.
It has earned a Guinness World Record at an impressive 483 meters above sea level. The Sky Musallah offers stunning panoramic views of Al Masjid Al Haram, The Holy Kaaba, and Makkah City.
The sky bridge connects the two twin towers of The Address Jabal Omar Hotel, spanning the 36th to 38th floors, and has a capacity of 520 people. It is a remarkable lookout point for guests staying at this iconic and centrally located hotel in Makkah.
Renowned Hotels in Jabal Omar Makkah
- Jabal Omar Hyatt Regency Makkah Hotel
- Hilton Suites Makkah Hotel
- Conrad Makkah
- Hilton Makkah Convention Hotel
- DoubleTree by Hilton Makkah Jabal Omar Hotel
- Jabal Omar Marriott Hotel Makkah
Thakher Makkah City
The Thakher project, a $7 Billion project, boasts a team of top-tier urban planners and designers, transforming the rugged hills of the Holy City into a highly accessible, diverse, and hospitable destination, which aims to host 30 million Umrah performers and six million pilgrims by 2030
Spanning 320,000 square meters and situated just 1km from Masjid al-Haram in Makkah, the completed Thakher Makkah will feature approximately 100 land plots designated for hotels, residences, commercial spaces, and service-related establishments.
Keep Reading: Saudi Arabia Allows Foreign Investment in Makkah and Madinah Real Estate Companies
