JEDDAH, 11 June 2004 — The pressure on Makkah and Madinah services and facilities for pilgrims, visitors and residents has dramatically increased since the Umrah season has been extended to nine months of the year. A primary concern of the authorities is the pressure on accommodation for visitors.
Accommodation and property prices in Makkah and Madinah, especially in the central area near the Holy Mosques, are at record high prices. The building land is estimated to be the most costly in the world and reaching sometimes as much as SR350,000 for the square meter. Thus when new buildings are constructed, they tend to go upward, not outward.
In an effort to maximize the cost efficiency of land use and to introduce new accommodation solutions to the majority of Muslims around the world, the concept of space-share has been introduced to the Kingdom for the first time. Now legalized under the religiously approved term “Al-Musharaka Bel Manfea”, sharing of usage/utilities, it allows trading in accommodation space.
The newly legalized idea allows the sale and trading of particular units of accommodation for periods of time at a fixed price. Each unit can be purchased by the head leaseholder in multiples of seven days for a period of 20 years and be used or sublet or given away as a gift as he wishes.
Different from time-share where a client buys a period of time in a holiday complex that allows him to use a non specific apartment for a fixed period each year, space-share programs are far more flexible system that allows both a particular apartment and the allocated time to be selected.
Each apartment has a potential maximum letting period of 48 weeks in any one Hejirah year, with the balance used as maintenance periods spread throughout the year. This allows the unit to be shared by as much as 48 owners, thus maximizing the use of space around the central Haram district in both Makkah and Madinah.
By purchasing a fixed space and time in a year the owner is able to ensure that he has an allocation in Makkah or Madinah at the time that suits him. Instead of building or purchasing to ensure accommodation, prospects can effectively secure ownership for twenty years and ease the pressure for the demand on building land.
The fixed cost of the apartment is supplemented by a maintenance fee each year to ensure readiness, high quality continued service and the periodic refurbishment of units. Run and serviced to international hotel standards, the apartments are furnished down to the last detail, including soft furnishings.
Essam Awad, CEO and president of Manazel Al-Harmain, sees the concept as a way to ease pressure on living space in Makkah and Madinah. “Projections estimate the flow of Umrah pilgrims to be in the region of 18 million a year by 1430H,” Awad, a property developer expert in Makkah for more than 20 years and one of the Kingdom’s few space-share experts, said.
He indicated the annual growth rate of foreign pilgrims issued by the Central Department of Statistics at the Ministry of Haj.
“Umrah visitors average around six percent per year increase and pilgrims three point six percent,” he said. “These figures do not include the 500,000 or so pilgrims a year who do not register with the government.”
Makkah is surrounded by mountainous country that severely limits the options for horizontal expansion of building.
The only practical solution is to build upward or find an unconventional solution such as space share. Awad admits that the cost of the space-share leases are not in everyone’s grasp. “It does address the problem of the limited space available in a practical way as well as the cost issue,” he said. “Every single apartment leased takes up to 48 people out of the queue looking to purchase a small property outright and have people sharing cost,” he said, “and therefore releases that land for future vertical development.”
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