Makkah just announced a major real estate project

Since the foreign ownership policy came into effect, there has been a string of real estate projects announced in Makkah.

The latest round included an extension of Masar into Masar Gardens, extending the city's development west of Masjid al-Haram.

A dusk aerial render of Masar Gardens, with Masjid al-Haram and its minarets at the top of the frame and the development's towers stepping down the hillside towards the foreground.

On 17 August, Thakher Development, the lead developer of Thakher Makkah, announced yet another project: Mathaba.

Thakher's existing project, located north of Masjid al-Haram, is still seeing construction underway. Whilst the likes of Novotel, Radisson and Park Inn have taken up the first plots which went up in 2024, there is still some way to go before the entire project is complete.

An aerial render of the whole Thakher Makkah development, a line of hotel and residential towers running through the hills north of the Haram.

Nonetheless, Thakher Development has announced Mathaba, located 800 metres south of Masjid al-Haram, along Ibrahim Al Khalil Road.

A daytime aerial render of the Mathaba district, with the Clock Tower and the Haram at the upper left.

The project comprises 5.5 million square metres of built-up area across a land plot of 686,000 sqm. The latest announcement noted that 341,000 sqm of land is up for sale.

The layout of the Mathaba project showcases a spiral structure around which hotels and apartments will be distributed.

75% of the development has been allocated to hotels, with the remaining 25% for hotel apartments. This is expected to add a significant volume of new stock to Makkah's hotel supply, a large share of which is ageing.

Given the lack of hotels in the mid-tier segment, Mathaba will address one of the most critical issues in Makkah's hotel industry: the missing middle.

Most hotels in Makkah are either located in close proximity to the Haram (driven by the Clock Tower and Jabal Omar precincts), or further afield (for example, the cluster of hotels in the Al-Naseem district).

A middle-ground solution with the likes of Masar Gardens and Mathaba will be a welcome change to Makkah's hotel offering, creating a segment that was previously missing. In doing so, the prices of Makkah's hotels will self-balance, addressing the price gap which currently exists, where there are few nightly rate options in the range of ⃁300-700.

The trend is clear for Makkah's real estate industry. Another new project joins an already strong pipeline, indicating strong investor confidence in a city that is increasingly attracting more visitors.

In the case of Mathaba, this project also happens to address a particularly pressing gap in the city's hotel industry.