DUBAI, 18 December 2007 — Saudi Arabia’s Jabal Omar Development Co. (JODC) plans to tap the Islamic debt markets to help finance a SR12 billion project in Makkah that will be built by developers including Binladin Group.
Jabal Omar awarded Binladin, the country’s largest contractor, and Saudi Oger the contract to build the project, the Saudi developer said in a statement yesterday.
“A portion of the sum will be raised organically, while a portion will come from Islamic finance and conventional methods,” Jabal Omar said, without giving details.
Jabal Omar raised $537 million by selling a 30 percent stake in a November initial public offering (IPO) that valued the company at around $1.79 billion.
The remaining 70 percent of the company is held by the owners of a 23 hectare (56.8 acre) plot of land in Makkah near the Grand Mosque.
The cost of land in Makkah, Islam’s holiest city, has surged, with land selling for as much $50,000 per square meter, according to government statistics.
That compares with $14,522 per square meter in London, according to the Global Property Guide.
Jabal Omar said it expected to complete construction of the development in three years.
In addition to a prayer area accommodating 65,000 people, the development will have 39 buildings including hotels, residences and retail facilities, it said.
More than 1.6 million pilgrims have come to Saudi Arabia from abroad for this month’s Haj pilgrimage, the largest regular religious gathering in the world.
The Jabal Omar project includes building of 40 residential towers, five-star hotels and commercial centers, construction of a road parallel to Um Al-Qura Road and parking area for thousands of vehicles.
“It is one of the largest real estate projects in the Arab world,” said Abdul Rahman Faqeeh, chairman of the constituent committee for JODC.
The Capital Market Authority (CMA) allowed JODC on May 9, 2007 to go public. Saudi authorities licensed the company in order to carry out a major real estate project in Makkah.