6 February 2018 / 20 Jumada Al-Awwal 1439: Global real estate advisory firm Alpha1Estates International said on Tuesday that its real estate index for Makkah and Madinah had fallen by 14% in 2017, based on Saudi Arabia’s first year of implementing its reform agenda with Vision 2030 and the National Transformation Plan 2020 (NTP).
The Ihsan al-Haramain Index, the first index to solely track Saudi-listed companies involved in real estate development in Makkah and Madinah, last year rose by 9%, following the first year of the Kingdom’s economic and social reform agenda.
“2017 has been a seismic year of change for the Kingdom, as key economic and social reforms start to be implemented under the leadership of the HRH Crown Prince, in the Kingdom and also impacting Makkah and Madinah.” said Mr. Talal Mahmood Malik al-Alawi, Chairman and CEO of Alpha1Estates International. “As the Kingdom’s GDP growth was at a blip of 0.6% in 2017, the Ihsan al-Haramain Index’s performance fell 14%, though the fundamentals of the sector are sound with deepening reforms expected to show a rebound in 2018.”
There was a near universal fall across all stocks on the Ihsan al-Haramain Index by year end, apart from Dar Al-Arkan Real Estate Development Company which rose by a colossal 134%, with sales projects including Al Tilal Villas in Madinah, previously marketed by Alpha1Estates. Madinah-related stock fell by only 3.7% versus a 18.5% fall in Makkah-related stock. Two new stocks were also attended to the Real Estate Development Index, with the Red Sea Housing Services Company started trading on the Tadawul Stock Exchange in Saudi on 3 January 2017 and the Alandalus Property Company started on 12 January 2017.
Saudi Arabia’s Crown Prince Muhammad bin Salman personally launched the Saudi Vision 2030 in April 2016, an economic diversification plan to reduce the Kingdom’s dependence on oil, and in June, the NTP was launched with 543 policy initiatives across 24 government entities.
Talal Mahmood Malik Al-Alawi, the Chairman of Alpha1Estates, met with HRH Crown Prince Mohammad bin Salman bin Abdulaziz Al-Saud in Saudi Arabia on 24 October 2017, a milestone event which went viral on social media, and was interviewed by the United Kingdom’s Guardian Newspaper on the accession of the Crown Prince on 21 June 2017.
On 27 December 2017, the Chairman also attended the Emaar Makkah Conference in Jeddah, focused on the development of the Makkah region, with speakers including Prince Khalid Al-Faisal, the Special Adviser to the Custodian of the Two Holy Mosques, Governor of Makkah and the Head of the Makkah Development Authority, Prince Abdullah bin Bandar bin Abdulaziz, Deputy Governor of Makkah, HE Dr. Mohammad Saleh Benten, HE Sheikh Dr. Abdulrahman bin Abdulaziz Al-Sudais, President of the Affairs of the Two Holy Mosques and HE Sheikh Saleh bin Abdulaziz Al-Sheikh, Minister of Islamic Affairs. On 11-13 December 2017, the Chairman also attended the 4th Forum for Promoting Peace in Muslim Societies in Abu Dhabi, UAE, at the invitation of its Chairman, His Eminence Sheikh Abdullah bin Bayyah.
Specifically for the real estate sector in Makkah and Madinah, the Chairman also met with the Public Investment Fund, Khazanah International, Jabal Omar Development Company, Dar Al Arkan and Knowledge Economic City.
In Vision 2030, the Kingdom regards as its first pillar its status as the heart of the Arab and Islamic worlds. In NTP 2020, the Kingdom has aims to increase the number of Hajj pilgrims from 1.5 million to 2.5 million by 2020, Umrah pilgrims from abroad from 6 million currently to 15 million by 2020 and to increase the sectoral revenue through private sector partnerships by a tremendous 240-times fold from SAR 80 million (USD $ 21.3 million) and SAR 19 billion (USD $5.1 billion).
In order to ensure stability, non-oil economic dependence and global marketing in the real estate sector of Makkah and Madinah, Alpha1Estates in 2012 proposed five critical pieces of legislation that focus on globalising the sector, which will lead to greater investments, prosperity and quality of life in the Holy Cities. These included easing of immigration and travel for non-Saudi Muslims; setting up a real estate regulatory authority to monitor buying and selling of real estate and prevent monopolies; empowering non-Saudi Muslim ownership, leasing and investment of real estate; easing non-Saudi Muslims setting up a company, working, residing or studying in the Kingdom, and introducing and scaling Islamic mortgage financing in the Kingdom.
The Crown Prince as part of the Vision 2030 has announced the proposal for foreign residents in Saudi Arabia to potentially obtain green cards for permanent residence, to be implemented within five years and which would contribute over USD $10 billion to government revenues, with these currently under study by the Shura Council. As part of Vision 2030, the Kingdom said it ‘would will seek to improve living and working conditions for non-Saudis, by extending their ability to own real estate in certain areas, improving the quality of life, permitting the establishment of more private schools and adopting an effective and simple system for issuing visas and residence permits.’
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, and has worked with the three of the five largest real estate developers in Saudi Arabia and five of the biggest in the Middle East.