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.
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.
Nonetheless, Thakher Development has announced Mathaba, located 800 metres south of Masjid al-Haram, along Ibrahim Al Khalil Road.
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.
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Five hotels and 4,885 keys, from Sofitel Jabal Omar this year to Novotel in 2030.
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Off-plan apartments from £370,000 beside the Haramain station, with a 5% down payment and freehold title.
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Four lines, 183 km and 89 stations, phased in from 2032. The design deadline is October.
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The lowest rated of the 25 major brands near the Haram is renovating its rooms, as new hotels raise the bar.
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Dhaka and Cairo are touted as the latest players considering the pact.