DUBAI: Saudi Arabia’s lifting of quota on Hajj pilgrims has boosted the Makkah property market during the first half despite major infrastructure works on the Grand Mosque.
Property consultancy JLL particularly noted that Makkah was the only major city in the Kingdom to have witnessed a significant increase in sales activity in the residential sector over the first half, as prices dropped to reasonable rates and induced interest from buyers.
Residential transactions grew 12 percent over the first half of the year compared with the same period last year, prompted by a drop in Makkah land prices, the consultancy said.
Meanwhile, government numbers showed a higher number of Umrah pilgrims during the first half, with visa issuances up 5 percent to 6.7 million compared with last year’s Umrah season.
“The rising number of pilgrims can be attributed to the partial completion of the Holy Mosque expansion, and extending the Umrah season by an additional month,” JLL said in its report.
The policy shift should benefit Makkah’s retail and hotel sectors, particularly those located centrally and near the holy sites, as they typically enjoy above average business during the pilgrimage season.
During the first half, approximately 7,000 square meters of retail space entered the Makkah property market while 1,900 keys were added in the area’s hotel sector, with Hilton Makkah Convention Hotel contributing 783.
Retails rents for regional, neighborhood shopping centers and community centers remained largely unchanged in the first six months, although rates in Markazia decreased by 7.5 percent during the period.
The hotel sector meanwhile is expected to pick up momentum this year during the 2017 Hajj season, after experiencing lower occupancies and average daily rates earlier on.
On the office segment, the property consultancy said that average office rents in Makkah stood at SR605 per square meter during the first half, 5 percent lower from last year’s SR637 per square rate. Vacancy rates however fell to 16 percent from 19 percent last year.
Makkah property market boosted by lifting of quota on Hajj pilgrims
Makkah property market boosted by lifting of quota on Hajj pilgrims
Taiba Investments profit rises 9% on stronger pilgrim-driven revenue
RIYADH: Saudi Arabia’s Taiba Investments Co. reported a 9.32 percent rise in annual profit to SR364.8 million ($97.20 million) as higher pilgrim flows lifted revenue to SR1.36 billion, a filing on Tadawul showed.
Net profit attributable to shareholders increased from SR333.7 million a year earlier, with earnings per share climbing to SR1.40 from SR1.28. Revenue rose 3.7 percent to SR1.36 billion in the year ended Dec. 31, compared with SR1.32 billion in 2024.
Taiba, a hospitality and real estate developer backed by the Kingdom’s sovereign wealth fund, Public Investment Fund, focuses on hotel and property assets primarily in the holy cities of Makkah and Madinah.
In a Tadawul filing, the company stated: “This growth was primarily driven by improved performance across the company’s segments in Makkah and Madinah, supported by higher numbers of visitors and Umrah pilgrims, the commencement of operations of new facilities, and increased revenues from the real estate segment.”
Taiba Investments reported that the SR31.1 million rise in net profit was mainly attributable to improved operating performance, the reversal of a litigation provision previously recognized in 2023 following the termination of a contractual relationship with one of the operators after a settlement between the parties, and capital gains realized from the expropriation of one of its properties in Madinah.
Total comprehensive income attributable to shareholders declined 55.53 percent to SR198.2 million from SR445.7 million.
Other comprehensive income recorded a loss of SR166.6 million, compared with a gain of SR111.9 million in the previous year, primarily due to a decline in the fair value of financial derivatives used for hedging and a decrease in the market value of certain investments measured at fair value through other comprehensive income.
Shareholders’ equity increased marginally by 0.04 percent to SR6.85 billion. Taiba's share price saw a 3.03 percent increase to SR34 by 10:20 am Saudi time.
