“About 3,000 of these new units worth more than SR40 billion will be seized as part of the project of Custodian of the Two Holy Mosques King Abdullah for the development of Makkah,” said Mansour Abu Rayyash, chairman of the real estate committee at the Makkah Chamber of Commerce and Industry.
He said the other 4,000 houses would be demolished for the construction of the parallel road from the western side of the Grand Mosque.
“About 1,300 real estate units will be demolished next year after their value is evaluated for the construction of the second ring road while the remaining 2,700 houses will be demolished to make way for the first ring road and other development projects,” he said.
Abu Rayyash explained real estate units that would be seized for the second ring road were those lying at the extension of the road joining the Al-Biban area and Al-Kaaki bakeries.
“The real estate in this area is very expensive and the value of the houses to be seized and demolished may range from SR15 billion and SR20 billion,” he said.
According to Abu Rayyash, 1,700 units would also make way for the construction of the first ring road, power plants and other service facilities.
He believed the slowdown in real estate investment during the project’s previous phase in Makkah was caused by the focus on providing accommodation to pilgrims.
“The real estate market will soon pick up especially as work has started on the projects of Custodian of the Two Holy Mosques King Abdullah to develop the holy city that carries an open budget,” he said.
He estimated the share of real estate investments to be more than 40 percent of the entire investment portfolio in Makkah.
“The injection of more than SR40 billion into the market next year as compensation for the owners of confiscated land will raise the level of liquidity to about SR150 billion.
Abu Rayyash said investing in seasonal accommodation for pilgrims constituted about 70 percent of business for 35 to 40 percent of investors who were from outside Makkah, 20 percent of trade went into purchasing of land, and construction of permanent housing accounted for the remaining 10 percent.
He expected the expropriation of land for the construction of ring and axial roads to turn currently neglected areas into attractive centers for future investment.
