Saudi Arabia’s Shariah compliant asset manager Sidra Capital will be leveraging on its client network to attract foreign investors for a Mecca project being undertaken jointly with construction firm Sager Group.
Samer Shaaban, the Local Real Estate Division head at Sidra Capital, shared with IFN Investor the foreign capital received will be deployed to develop the necessary infrastructure on a greenfield plot of 734,744 square meters in the Al-Aziziyah district of Mecca.
This project is being handled via the Al-Bushra Infrastructure Development Fund, explained the division’s Investment Manager Durrah AlSammahi. Sager Group injected the land plot, valued at SAR1.4 billion (US$373.33 million), while Sidra Capital is responsible for raising SAR600 million (US$160 million).
“The SAR2 billion (US$533.33 million) real estate investment fund’s offer period opened in January 2025 to receive subscriptions from foreign investors, the cash contributions will go to cover the construction cost to complete infrastructure for the foundation.”
Durrah said the investment opportunity takes advantage of liberalizations announced by the Saudi Capital Market Authority. “Foreign investors cannot have direct ownership of properties in Mecca. This fund gives them an opportunity to have investments in Mecca, which they will later obtain returns.”
Once the foundation work is completed, the land plot will be subdivided and sold to strategic developers or investors. As fund manager, Sidra Capital’s responsibility is to sell the subdivided plots for optimal returns.
Structured as a private close-ended fund of three years, with options to extend for twice for one-year periods each, Durrah said yield return to investors will come solely from subdivided plot sales.
Unsold plots will go to Sager Group when this fund closes. The next stage of developments is outside the scope of the fund, said Durrah.
Noting this project comes under the patronage of the Ministry of Municipalities and Housing, which has expressed strong support for initiatives aligning with its vision for sustainable housing and real estate development in Saudi Arabia, Samer said Sager Group will be closely involved with future proposals.