Real estate experts have welcomed Saudi Arabia’s decision to allow foreign investment in real estate companies in the Makkah and Madinah regions. They said it will attract more foreign capital, speed up major projects, and support development in these cities.
The Saudi Capital Market Authority (CMA) said in a statement that this move aims to stimulate investment, enhance the attractiveness and efficiency of the capital market, and strengthen its regional and international competitiveness while supporting the local economy.
“This includes attracting foreign capital and providing the necessary liquidity for current and future projects in Makkah and Madinah through the investment products available in the Saudi market, positioning it as a key funding source for these distinctive developmental projects,” the statement added.
The CMA decision follows the approval of the controls for the exclusion of companies listed in the Saudi Stock Exchange (Tadawul) from the meaning of the phrase (Non-Saudi) in accordance with the Law of Real Estate Ownership and Investment by Non-Saudis.
The CMA said that as per the decision, foreign investment in these companies would be limited to shares of these Saudi companies listed on the capital market, as well as to convertible debt instruments, or both.
However, people without Saudi nationality would not be allowed to own more than 49% of shares of the companies involved. Strategic foreign investors, who are not permitted to own shares or convertible debt instruments in these companies, would be exempted from owning shares of these companies.
The new rules allow non-Saudi investors to benefit from the economic advantages of existing and future projects without violating the relevant laws, regulations, and instructions, particularly the Law of Real Estate Ownership and Investment by Non-Saudis, whether during the companies' operations or liquidation.
At the same time, CMA grants Saudi listed companies the right to acquire ownership, easement, or usufruct rights over properties allocated for their headquarters or branch offices within Makkah and Madinah.
This is contingent upon the property being fully utilized for this purpose and in accordance with the Exclusion Controls exemption regulations under the Law of Real Estate Ownership and Investment by Non-Saudis.
Real estate expert Ahmed Al-Faqih told Asharq Al-Awsat that the decision will benefit the overall Saudi real estate market, especially in Makkah and Madinah. It will attract more foreign investment, supporting Saudi Vision 2030's goals of boosting investments and reducing reliance on oil.
Al-Faqih expects the market to react positively, with more investors coming in. The decision’s impact will go beyond buying and selling properties to include changes in regulations and market innovations.
“We’ll see more capital flowing into the market, and development projects will transform the two cities into major construction hubs in the next five years, especially with their ongoing religious tourism during Hajj and Umrah,” said Al-Faqih.
He added that the decision targets Muslims worldwide who want to invest in the holy cities, as well as other investors.
“This long-awaited move is a sign that Saudi Arabia is close to allowing foreign investment in its real estate sector,” he noted.
