RIYADH: Saudi Arabia's holy city of Mecca is set to receive a commercial infrastructure boost, with Alandalus Property having started construction on a Saudi riyal ($222 million) project.
In a statement to Tadawul, the Saudi-based real estate company announced the start of work on a new shopping mall in Makkah Al Mukarramah, which will span over 50,650 square meters.
The centre is designed to have a total of 350 leasable units, including showrooms, retail spaces, hypermarkets, entertainment spaces and restaurants. It also has a parking lot for 1,800 cars.
Alandalus’ move underlines the company’s commitment to boosting Mecca’s commercial potential. The project follows the recent expansion of UAE-based Lulu Group, which launched two new projects in Mecca and Madina earlier this year.
“According to the project developer’s report, the most suitable final engineering design for the project has been selected from a pool of designs prepared by the most skilled engineering offices in the Kingdom,” Alandalus said in a Tadawul statement.
The report also said construction is now underway, with all necessary municipal permits already in place, and the center is expected to be completed in the first quarter of 2027.
The project is being developed by Masat Property, a joint venture between Alandalus and Buroj International, with Hamat Holding, in which Alandalus holds a 25 per cent stake, to handle the construction.
Funding for this project will come primarily from bank loans, with additional contributions from partners’ own sources.
Ongoing development projects aim to significantly upgrade the infrastructure in Makkah and Madinah, supporting their transformation into leading business and tourism hubs.
In December 2022, the Makkah Chamber of Commerce, the Madinah Chamber of Commerce and the Islamic Chamber of Commerce, Industry and Agriculture signed the Manafia Agreement, which aims to transform the holy cities into important financial and business hubs in the Islamic world.
In a separate update, Alandalus reported a 67 percent decline in net profit for the first quarter of 2024, falling to 4.7 million riyals compared to the same period last year.
The decline was due to higher financing costs and increased expenses in the hospitality and office sectors.
In addition, total revenue decreased by 2.70% year-on-year to 53 million riyals, driven by a 6% decrease in the retail and operations group.
