Saudi Arabia authorizes foreign property investments in holy cities
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Foreign investors will be allowed to buy shares and convertible debt instruments in companies listed on the Saudi Stock Exchange that own public or private real estate within city limits.
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Policemen stand alert at the Mina tent camp ahead of the Hajj, in Mecca, Saudi Arabia, Sunday, June 25, 2023. (AP)
In an attempt to attract foreign investments, Saudi Arabia has decided to open investments in publicly traded companies owning properties in the holy cities of Mecca and Madinah.
Starting January 27, foreign investors will be allowed to buy shares and convertible debt instruments in companies listed on the Saudi Stock Exchange that own public or private real estate within city limits, as announced by the Capital Market Authority (CMA). However, strategic foreign investors are exempt from this rule, and foreign ownership is capped at 49% of a company’s listed shares, according to the CMA.
"The Capital Market Authority 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," the CMA said.
Following the announcement, shares of some real estate companies surged. Jabal Omar Development Co. rose by as much as 10% at market opening in Saudi Arabia. Other related companies include Dar Al Arkan Real Estate Development Co., Taiba Investments Co., Emaar Economic City, and Makkah Construction & Development Co.
This move aligns with Saudi Arabia’s Vision 2030 diversification plan, which aims to enhance the country’s attractiveness as an investment hub. The kingdom has implemented significant reforms to investment laws, relaxed foreign ownership regulations in the stock market, and is working on major expansion projects in Mecca and Madinah to accommodate 30 million foreign pilgrims annually by 2030.
