JEDDAH: Saudi Arabia’s Capital Market Authority on Monday allowed financial market institutions to accept subscriptions of non-Saudis in real estate funds that invest wholly or partly in Makkah and Madinah, said a statement.
The CMA stressed that the capital market institutions must ensure compliance with the relevant laws when managing the real estate funds located within the boundaries of the two holy cities and upon liquidation of those funds.
The authority said the decision will contribute to relying on the capital market as a diversified financing channel, as well as strengthening the pillars of the Kingdom’s Vision 2030, which aims to make the Saudi capital market attractive to local and foreign investment.
“I believe this will leave a very positive impact on the real estate market of Makkah and Madinah, especially in the retail and hotels sectors. It will increase demand from foreign investors who want to invest in a very promising market,” said Khalid Almobid, CEOof Menassat Real Estate Co.
The Saudi real estate sector is witnessing a boom as several megaprojects are underway in the Kingdom in line with the Vision 2030. The Kingdom's real estate sector is a key and effective economic driver for the country’s gross domestic product and is connected to at least 120 industries. The government is offering several incentives to foreign investors willing to work in the Saudi market and contribute to the growth of the real estate sector and the overall economy of the Kingdom.
The net foreign direct investment in the Kingdom has jumped to SR51.8 billion ($13.81 billion) in the second quarter of 2021, compared to SR3 billion in the same quarter of 2020, an increase of about 1,574 percent based on data released by the Saudi Central Bank.
Saudi Investment Minister Khalid Al-Falih recently told Al Arabiya that the Kingdom expected a surge in foreign investment in 2021 and the coming years. “We are still in the preparation stage, and the process of attracting foreign investment has not been fully launched, but the Kingdom has a mighty internal investment machine, such as the Public Investment Fund, which launched major projects and several companies that will be the nucleus of different sectoral groupings,” Al-Falih said.
