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January 1, 2011 / 26
Muharram 1432: Global Islamic real estate consultancy Alpha1Estates
International said on January 1, 2011, and in the new Islamic year of
1432 that the coming decade will usher in a maturing phase of the real
estate sector of Makkah and Madinah, leading to a lucrative boom in the
Holy Cities.
The company, which launched to global acclaim five years ago on January
1, 2006, said that the past decade had been about laying the
foundations of flagship projects and physical infrastructure, but the
coming one would focus more on building non-physical infrastructure
aimed at convenience - for the pilgrim (resident and visitor) and
investor (domestic, regional and global).
‘Alpha1Estates International is immensely proud to celebrate its
fifth anniversary today, marking more than half a decade of
unparalleled global reputation and experience in marketing real estate
projects in Makkah and Madinah,’ said Mr Al-Alawi, Chairman of
Alpha1Estates International.
‘Our focus, and that of all those involved in the real estate
sector in the Holy Cities, should now be increasingly directed at
bringing world-class infrastructure which will make it easier for
Muslims to live, visit, invest and work in the Holy Cities.’
Alpha1Estates International launched in 2006 to become the world's
first company to market Saudi Arabian property globally and also the
first company to market property in both Makkah and Madinah, with its
projects ZamZam Tower, Makkah, Abraj al-Bait, Makkah, Hajar Tower,
Makkah and Taiba Eastern Tower, Madinah all centrally located near the
two Holy Mosques. In subsequent years, it has launched the world's
first bespoke real estate consultancy programme and joint-investment
fund focused on the Holy Cities.
Real estate investment in Makkah and Madinah accounts for 40% of total
real estate investments in the Kingdom, reflected in land prices in the
Holy Cities being the most expensive in the world at between $70,000
and $110,000 per square metre, hitting $133,000 per square metre in
Makkah in 2010.
Alpha1Estates' current flagship projects are Abraj al-Bait in Makkah
and Al-Tilal Villas in Madinah. The Al-Tilal Project in Madinah allows
Muslims from all over the world to purchase permanent villa homes
nearly 10 kilometres from the Prophet's Mosque. The Royal Clock Tower
is the central tower in the Abraj al-Bait Project, 50 metres opposite
the Grand Mosque in Makkah, which allows Muslims to buy apartments on
24-year leases as part of a government-based religious endowment.
In January 2010, the company launched the Ihsan al-Haramain Index, the
first index to solely track Saudi-listed companies involved in real
estate development in Makkah and Madinah. The Ihsan al-Haramain Index
reveals for the first time internationally that the real estate sector
in the Holy Cities has suffered in 2010 due to a lack of mobilisation
in non-physical infrastructure, which will change in 2011 and beyond.
‘The Ihsan al-Haramain Index fell by 21 percent this year,
affecting both Makkah and Madinah to the same degree, and
underperforming by 6 percent the Tadawul (Saudi Stock Exchange) Real
Estate Development Index which fell 15 percent this year,' said Mr.
Al-Alawi. ‘Be it the long-awaited Saudi mortgage law or certain
regulations on investment in the Holy Cities, it is clear that we are
now seeing the need for a vision beyond bricks, mortar and steel - and
one which I am delighted to state is forthcoming.’
To commemorate the start of the new decade, the company also would be
expanding its operations in 2011 through its own global offices, joint
ventures, agency and franchise appointments.
‘In 2010, we expanded our footprint in the Middle East,
Asia-Pacific, Americas and Africa, both with our own localised
operations as well as agency appointments,’ said Mr. Al-Alawi.
‘In 2011 and beyond, we look forward to extending our operations
globally to meet demand.’
Over ten million Muslim pilgrims from 140 countries visit the Holy
Cities annually for Hajj and Umrah, contributing 30 billion Saudi
riyals ($8 billion) per year, the second-most lucrative source of the
Kingdom's revenue after oil.
Alpha1Estates International's reputation as the thought market leader
on real estate investment in the Holy Cities was re-inforced in June
2010 when leading property firm Jones Lang LaSalle published a report
on the sector with the headline ‘Infrastructure key to increasing
religious tourism in Saudi's Holy Cities', further stating that the
sector was 'unique in the MENA (Middle East and North Africa) region in
that they are constrained more by supply and capacity constraints and
not demand (which is effectively unlimited).’
In January 2010, nearly half a year earlier, Alpha1Estates
International had publicly stated that investment in the real estate
sector of the Holy Cities was 'based on inelastic and rising global
demand from the world's billion and a half-plus Muslims, supported by
significant public and private sector investment in infrastructure,
both for the Grand Mosques and transport to them'.
Milestones in 2010
In 2010, Alpha1Estates International said there had been many
milestones in the real estate sector in Makkah and Madinah. In the
realm of the Holy Mosques and Sites, there had been multi-billion
dollar expansion of the Grand Mosque in Makkah and the Prophet's Mosque
in Madinah, and the Saudi Commission for Tourism and Antiquities (SCTA)
announced that it will be developing heritage sites including the Ain
Zubaida water supply system, urban centres in Jabal Al-Noor and Jabal
Al-Thawr as well as historic buildings and wells in Makkah.
In the realm of real estate projects, there was the completion of the
Abraj al-Bait project in Makkah, including the completion of the
tallest concrete building in the world, Makkah Clock Royal Tower (and
the second tallest building in the world after the Burj Khalifa, Dubai,
UAE) as well as the launch of the King Abdul Aziz Road project and the
Umm al-Joudah project.
In terms of transport infrastructure, there was the first-phase
completion of the 18km Makkah Metro railway; the continuation of the
first phase of the 450km-Haramain Railway, linking Makkah, Madinah and
Jeddah; the expansion of the Jeddah International Airport for Makkah
and the Prince Mohammed bin Abdulaziz International Airport in Madinah;
international airlines have boosted their Hajj coverage, with some like
Brunei Airlines operating their first Hajj flight to Jeddah in 2010,
whilst direct international flights to Madinah have also increased with
Emirates, Gulf Air and Royal Jordanian initiating their services in
2010.
‘We are pleased to witness these milestones, including the
completion of the Royal Clock Tower in Makkah in 2010, marking five
years since we internationally launched the project,' said Mr.
Al-Alawi. Alpha1Estates International launched Abraj al-Bait, Makkah,
in a global television presentation on December 25, 2005, which can be
viewed on its channel on YouTube.com and Muxlim.com.
‘These and other achievements focus on physical infrastructure.
Whilst this will undoubtedly continue and should be enhanced, it is
investment in non-physical infrastructure which will help the sector
mature as the latest results of the Ihsan al-Haramain Index
reveal.’
A Future Vision
In the first half of 2011, two separate development organisations for
the Holy Cities of Makkah and Madinah will be launched by the Makkah
and Holy Sites Development Authority (MHSDA). For Makkah specifically,
the 'Holy Makkah Comprehensive Plan', a 100 billion Saudi riyal plan
($27 billion) to transform Makkah into a city with world-class
facilities and services, will also be launched. In 2012, other
significant projects like the new annex east of the Grand Mosque, the
Jabal Omar project near the Grand Mosque, and the Haramain Railway
between Makkah and Madinah are also set to be completed.
Mr. Al-Alawi said these latest developments from the public and private sector in the Holy Cities are promising.
‘As we enter the decade leading up to 2020 and 1440, the
vision to transform the Holy Cities is being realised.’
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