Mecca draws Indonesian sovereign wealth fund investment
That agreement is the first time a foreign state has acquired property in one of the holiest sites in Islam.
Indonesia's sovereign wealth fund, Danantara, has made history by purchasing a hotel and development plots in Mecca, Saudi Arabia for 2 billion riyals ($533 million). This marks the first time a foreign sovereign fund has acquired property in Mecca, one of the holiest sites in Islam. The deal was announced as Saudi Arabia opened up real estate ownership in Mecca and Medina to foreign investors and institutions in January.
Faisal Shaker, the CEO of Thakher Development, who sold the property to Danantara, told Semafor that the agreement could pave the way for further sales to Muslim-majority states. Thakher Mecca, a development less than a mile from the Grand Mosque in Mecca, is owned by Thakher Development. The company plans to launch sales of another Mecca development, Mathabah, next year.
Shaker stated that transactions they aspire to close in 2023 will not be less than the recently announced deal. Investment into Mecca and Medina is driven by faith and not by market cycles. Saudi Arabia aims to increase religious visitors to the kingdom to 50 million by 2030 from about 20 million in 2022. While Saudis are still the majority buyers, Gulf investors are also contributing significantly to the real estate market in the two cities.
Danantara is also exploring the possibility of investing in Medina, as reported by Asharq Bloomberg.
Written by urgent.news from Semafor's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
