Saudi Real Estate Legislation Places Makkah and Madinah at the Center of Global Investment Ambitions

An aerial view showing the urban boom and major hospitality projects surrounding the Grand Mosque in Makkah (SPA).
An aerial view showing the urban boom and major hospitality projects surrounding the Grand Mosque in Makkah (SPA).
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Saudi Real Estate Legislation Places Makkah and Madinah at the Center of Global Investment Ambitions

An aerial view showing the urban boom and major hospitality projects surrounding the Grand Mosque in Makkah (SPA).
An aerial view showing the urban boom and major hospitality projects surrounding the Grand Mosque in Makkah (SPA).

Saudi Arabia’s legislative and regulatory environment has become the primary driver reshaping the investment landscape in Makkah and Madinah, pushing the real estate sector beyond its traditional local framework toward a global horizon. This structural transformation, fueled by an unprecedented package of regulatory decisions approved by the government during 2025 and brought into effect at the start of 2026, has led to the emergence of an innovative real estate market model based on diversifying investment products and attracting major international companies and investors.

These regulatory reforms are being reinforced by a boom in mega infrastructure projects surrounding the Two Holy Mosques, embodying the goals of Saudi Vision 2030 to increase capacity for pilgrims and transform the western region into a magnet for foreign capital. This shift is reflected in a series of structural decisions and on-the-ground projects that have already begun reshaping the investment sector.

Last year saw the issuance of several major decisions and regulations, most notably the Saudi Cabinet’s approval in July of an updated system allowing non-Saudis to own property in the Kingdom, subject to specific ownership controls in the two holy cities. The decision came into force at the beginning of this year, with analysts expecting it to directly contribute to attracting international companies, increasing demand for residential and hospitality units, and broadening the investor base in the sector.

Extending these reforms further, the Capital Market Authority announced in January 2025 that foreigners would be permitted to invest in Saudi-listed companies owning permanent or temporary real estate assets within the boundaries of Makkah and Madinah. The move aims to boost foreign capital inflows, raise liquidity levels in real estate projects tied to the Hajj and Umrah ecosystem, and support the development of advanced hotels and residential complexes near the holy sites.

Within this broader development framework, Saudi Crown Prince Mohammed bin Salman launched the “King Salman Gateway” project in Makkah last October as a mixed-use destination spanning 12 million square meters adjacent to the Grand Mosque. The project includes around 50,000 residential units and 16,000 hotel rooms, while allowing ownership for Muslims worldwide in line with the Kingdom’s non-Saudi property ownership system.

Makkah is also home to the “Masar Destination” project, which stretches across 1.25 million square meters and is designed to accommodate 158,000 residents through 13,000 housing units distributed across 82 towers, in addition to 24,000 hotel units in 58 towers and 19,000 serviced apartments.

In Madinah, the “Rua Al Madinah” project is under development across an area of 1.35 million square meters, featuring around 80,000 hotel rooms and nearly 500 residential units. According to Ahmed bin Wasl Al-Juhani, CEO of Rua Al Madinah Holding Company, one of the Public Investment Fund’s subsidiaries, project completion has surpassed 65 percent.

Madinah (Ministry of Awqaf)

Infrastructure Projects Double Land Market Values

These mega projects and newly adopted regulations are being integrated with major infrastructure networks approved by the state to increase the number of pilgrims and Umrah visitors. They include the historic expansions of the Grand Mosque, modernization of transport and logistics networks surrounding the Two Holy Mosques, and regulation of urban development in the holy sites.

This has driven steadily rising demand for the hospitality sector, including hotels and serviced apartments, while significantly increasing the market value of strategic land plots near the Grand Mosque.

Amid this boom, Al Rajhi Capital and Thakher Development signed a memorandum of understanding last Thursday to establish a real estate investment fund in Makkah with investments exceeding SAR2 billion ($534.6 million). The fund, located within the “Thakher Makkah” project, aims to support the hospitality and housing sectors while enhancing the investment experience in the holy city.

A master plan of the “King Salman Gateway” project (SPA).

Record Profits

This legislative boom has also positively reflected on the financial results of real estate companies operating in the two regions and listed on the Saudi stock market, Tadawul, with firms posting record annual profit growth in 2025.

Jabal Omar Development recorded an exceptional elevenfold jump in profits, posting net earnings exceeding SAR2.39 billion ($637.3 million) in 2025, compared with around SAR200 million ($53.3 million) in 2024. The company also maintained positive momentum in the first quarter of 2026, posting SAR116.99 million ($31.2 million) in profits.

Makkah Construction and Development Company also posted a 15 percent rise in profits to SAR474 million ($126.4 million), compared with SAR411 million ($109.6 million) in 2024, while continuing its growth trajectory in the first quarter of 2026 with an 8 percent increase to SAR162.2 million ($43.2 million).

Meanwhile, Taiba Investments reported a 9.3 percent increase in profits, reaching SAR364 million ($97.1 million) in 2025, compared with SAR411 million ($109.6 million) in 2024. The company also maintained positive performance, generating profits exceeding SAR124.8 million ($33.3 million) during the first quarter of 2026.

Entry of Foreign Developers Intensifies Competition

Providing an analytical reading of the market, real estate expert and appraiser engineer Ahmed Al-Faqih told Asharq Al-Awsat that Makkah and Madinah represent the spiritual destination of two billion Muslims worldwide, noting that these regulations create momentum capable of meeting the aspirations of a broad segment of Muslims seeking property ownership in the western region, which also includes Jeddah and Taif.

He expected the deeper impact of these systems to become evident during the first and second quarters of 2027.

Al-Faqih added that the impact would extend to increasing both the volume and quality of real estate transactions, with greater focus on the residential sector compared with agricultural and industrial sectors. He also predicted accelerated real estate development through the launch of tailored products that account for the diverse cultures of targeted nationalities.

He noted that the western region’s market is expected to witness the entry of non-Saudi developers who will compete with local developers on the quality of real estate products. He added that government regulators are focusing on two core principles: “real estate balance and sustainability,” which would further increase the market’s attractiveness to international capital and shift it from randomness toward regulation and steadily rising profitability over the coming decade.

Serving the Pilgrim Ecosystem

Ayman Al-Sultan, a real estate sector observer, told Asharq Al-Awsat that real estate activity in Makkah and Madinah is inherently tied to a broader economic and urban ecosystem dedicated to serving pilgrims, noting that development over recent years has been comprehensive across both urban and regulatory tracks.

He pointed out that regulatory updates related to allowing non-Saudis to own property under specific controls, alongside opening investment in Saudi-listed companies holding real estate assets within the two cities, reflect a direction toward broadening the investment base within a clear regulatory framework that preserves the unique status of the two holy cities.

He added that major infrastructure projects linked to Hajj and Umrah have boosted interest in real estate projects tied to hospitality, housing, and support services for the Two Holy Mosques. Based on market observations, he said the convergence between regulation and urban development is steering the market toward more organized projects linked to Hajj and Umrah-related services in the coming phase.

The mixed-use residential and commercial complex developed by Makkah Construction and Development overlooking the Grand Mosque (Makkah Construction and Development).

Current Hajj Season Translates Legislative Boom Into Reality

These regulatory developments are casting a direct shadow over the current Hajj season, which is witnessing peak human and investment flows. Observers believe this season represents the clearest practical reflection of infrastructure flexibility following the implementation of the latest legislative decisions.

Residential and hotel complexes surrounding the Two Holy Mosques are no longer merely static real estate assets. Instead, they have evolved into a core pillar of an integrated hospitality system managed by investment funds and listed companies seeking to meet growing demand within an attractive and stable regulatory environment.

Ultimately, this intensive operational momentum, coinciding with the influx of pilgrims, demonstrates that the new real estate model in Makkah and Madinah has moved beyond the theoretical planning phase and entered the stage of tangible returns.

The convergence between flexible government legislation and massive capital spending on infrastructure places the western region on the threshold of a golden investment decade that is redrawing the map of international real estate development and reinforcing the status of the Two Holy Mosques as a central hub for sustainable development and rising economic growth in line with the ambitions of Saudi Vision 2030.

In the final analysis, this integration between regulatory achievement and the realities of the current season confirms that real estate in the holy capital and Madinah has already entered a phase of maximum investment appeal.



Riyadh Global Medical Biotechnology Summit Concludes with Agreements Exceeding SAR5 Billion

The fourth edition of the Riyadh Global Medical Biotechnology Summit 2026 concluded on Wednesday. (SPA)
The fourth edition of the Riyadh Global Medical Biotechnology Summit 2026 concluded on Wednesday. (SPA)
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Riyadh Global Medical Biotechnology Summit Concludes with Agreements Exceeding SAR5 Billion

The fourth edition of the Riyadh Global Medical Biotechnology Summit 2026 concluded on Wednesday. (SPA)
The fourth edition of the Riyadh Global Medical Biotechnology Summit 2026 concluded on Wednesday. (SPA)

The fourth edition of the Riyadh Global Medical Biotechnology Summit 2026 concluded on Wednesday with more than 40 agreements, initiatives and announcements unveiled through partnerships, programs and projects with a combined estimated value exceeding SAR5 billion.

The initiatives aim to advance biotechnology localization and strengthen its healthcare and economic impact, the Saudi Press Agency said.

The summit drew delegations and experts from more than 57 countries and more than 200 speakers. The total number of visitors and registrants exceeded 15,000.

Its program included more than 80 sessions, along with seven high-level executive sessions, covering artificial intelligence, genomics, vaccines, biomanufacturing, advanced therapies, investment, and talent development.

The Life Sciences Innovation Forum attracted five specialized investment funds that expressed readiness to invest more than $120 million in promising opportunities and companies.

Meanwhile, the Next Generation Biotechnologist Forum focused on empowering early-career researchers and scientists.

The accompanying exhibition spanned more than 6,000 square meters and featured more than 120 sponsors and exhibitors, including international pavilions from Spain, China, Japan, Germany, the United States of America, and the Republic of Korea.


Goldman Sachs Sees October Fed Hike after Hawkish Signal

FILE PHOTO: The Federal Reserve building is set against a blue sky in Washington, US, May 1, 2020. REUTERS/Kevin Lamarque/File Photo
FILE PHOTO: The Federal Reserve building is set against a blue sky in Washington, US, May 1, 2020. REUTERS/Kevin Lamarque/File Photo
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Goldman Sachs Sees October Fed Hike after Hawkish Signal

FILE PHOTO: The Federal Reserve building is set against a blue sky in Washington, US, May 1, 2020. REUTERS/Kevin Lamarque/File Photo
FILE PHOTO: The Federal Reserve building is set against a blue sky in Washington, US, May 1, 2020. REUTERS/Kevin Lamarque/File Photo

Goldman Sachs now expects the Federal Reserve to raise interest rates by another quarter point in October, making it one of the first major Wall Street banks to forecast consecutive rate hikes following the US central bank's hawkish signal on Wednesday.

The call represents a reversal of Goldman's earlier view that the US Fed had completed its tightening cycle after September's quarter-point increase.

Goldman said the Fed's updated rate projections, which showed a strong ⁠majority of policymakers ⁠expecting at least one more increase this year, pointed to a "two-hike baseline" for 2026.

The brokerage said October was the most likely timing for the next move because policymakers framed further tightening as supporting "a timelier return" to the Fed's 2% inflation target.

The ⁠Fed earlier on Wednesday raised interest rates by 25 basis points to a 3.75%-4.00% range.

Goldman said the meeting was more hawkish than expected, citing policymakers' rate projections, an upward revision to the neutral interest rate and Chair Kevin Warsh's repeated description of the move as having only "removed a dose of accommodation."

Traders see roughly 50% odds of another quarter-point Fed rate hike in October, according to CME Group's ⁠FedWatch tool, ⁠up sharply after policymakers signaled further tightening could be needed.

Goldman's revised forecast leaves Bank of America Global Research as the only other major brokerage expecting a more aggressive tightening path, with BofA projecting rate hikes in October and December, Reuters reported.

Markets will also be watching policy decisions from the Bank of England, due later in the day, and the Bank of Japan on Friday for further clues on the global interest-rate outlook.


Saudi Money Market Funds Face Investment Reshuffle

The Saudi Capital Market Authority’s headquarters in Riyadh (Asharq Al-Awsat)
The Saudi Capital Market Authority’s headquarters in Riyadh (Asharq Al-Awsat)
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Saudi Money Market Funds Face Investment Reshuffle

The Saudi Capital Market Authority’s headquarters in Riyadh (Asharq Al-Awsat)
The Saudi Capital Market Authority’s headquarters in Riyadh (Asharq Al-Awsat)

Saudi money market funds are entering a new phase of liquidity management and portfolio restructuring as new rules cap foreign investments at 5% of net asset value.

Fund managers will have to balance returns, liquidity and risk more carefully.

The rules do not require funds to exit existing foreign investments immediately. The Capital Market Authority has given managers transition periods to bring portfolios into compliance. This allows deposits and murabaha transactions to mature before funds are reallocated, avoiding early exits that could hurt returns or disrupt liquidity management.

The measures also require foreign counterparties to hold investment-grade credit ratings, strengthening protection against overseas exposure risks.

Financial analysts say the main impact may not be an immediate shift in capital flows. Instead, the rules are likely to reshape money market fund portfolios and how managers allocate liquidity between domestic and foreign instruments, based on returns, liquidity and credit quality.

As investment options in the Saudi market expand, the restructuring could direct greater attention toward domestic liquidity instruments. The transition periods will allow managers to adjust gradually, retain flexibility over existing investments and reduce the risks of rapid reinvestment.

Investor protection

Financial analyst Abdullah Al-Jabali told Asharq Al-Awsat that the move was part of the Capital Market Authority’s efforts to regulate higher-risk investments and strengthen investor protection, particularly amid global market shifts and continued uncertainty over interest rates.

The decision seeks to reduce Saudi money market funds’ exposure to foreign investments and limit the impact of related volatility, he said. The timing and scale of interest-rate cuts in the coming years remain unclear.

Al-Jabali said the measures go beyond imposing a cap on foreign investments. They also tighten requirements governing the entities through which funds may invest, taking into account credit ratings, solvency and reliability. This would help reduce risk and safeguard investors’ money.

The rules also seek to prevent money market funds from concentrating investments in instruments or entities that could be difficult to exit when needed. This would strengthen liquidity and improve funds’ ability to respond to market changes, he said.

Al-Jabali expected further regulations to follow, potentially covering other foreign investments such as real estate funds, financing funds and foreign sukuk. The measures could also extend to funds’ private-equity investments outside the kingdom.

He said the changes reflected the authority’s efforts to reduce risks linked to some investment practices, strengthen the investment environment and protect investors in the Saudi market.

Financial analyst Tariq Al-Atiq told Asharq Al-Awsat that the decision was primarily intended to reduce risk, strengthen investor protection and impose greater discipline on the placement of liquidity outside the kingdom.

Money market funds typically invest in deposits, murabaha transactions and short-term sukuk. Financial companies affiliated with banks manage a large proportion of these funds, he said.

A fund valued in Saudi riyals does not necessarily hold all its investments inside the kingdom, Al-Atiq said. Some liquidity may be placed with Gulf or foreign banks in search of higher returns. The decision would reduce that exposure and return some liquidity to the domestic market.

Giving funds up to two years to comply takes into account the fixed maturities of deposits and murabaha transactions, he said. Early exits could hurt fund performance, while allowing foreign deposits to expire without renewal would support a gradual, orderly transition.

Gradual compliance

The Saudi Capital Market Authority has capped foreign investments by public money market funds at 5% of net asset value and given managers transition periods to bring existing holdings into compliance.

Under a circular sent to capital market institutions, managers of public money market funds whose foreign investments exceed 5% must comply with the cap within two years of the circular’s date.

The requirement also affects transactions made during the transition. Until compliance is achieved, managers must not make an investment or enter into or renew any transaction that would breach the limit.

Funds with foreign investments exceeding 20% of net asset value face a shorter deadline. Their managers must reduce that exposure to below 20% within six months of the circular’s date.

They must then continue reducing foreign investments until they reach the final 5% cap within the timeframe set by the circular.

The rules therefore set different paths based on the level of foreign exposure. Funds above the 5% cap have up to two years to comply, while those above 20% must first bring their exposure below 20% within six months.

The authority also required all foreign investments by public money market funds to be made with counterparties holding investment-grade credit ratings issued by licensed credit-rating agencies.

Managers whose funds hold foreign investments that do not meet this requirement must bring them into compliance within two years of the circular’s date.

The Capital Market Authority stressed that capital market institutions must comply with the circular, the Capital Market Law and its implementing regulations. It designated the Collective Investment Schemes Compliance Department to answer questions about the new requirements.