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Jabal Omar signs SR12.4b deal with Jadwa

JEDDAH - Jabal Omar Company has signed a SR12.4 billion agreement with Jadwa Investment to finance a major real estate project in the holy city of Makkah.

The agreement was signed by Abdul Rahman Faqeeh, chairman of Jabal Omar Company , and Ahmed Al-Khateeb, managing director and CEO of Jadwa here on Saturday.

Prince Faisal bin Salman, chairman of Jadwa , said in a statement on the occasion that his company's efforts to win the financing of the project reflected its importance, as the project was located at the holiest place for Muslims across the world and would serve pilgrims who come for Haj and Umrah from different parts of the globe.

The finance provided by Jadwa is both long-term and short-term. Long-term financing will be through Islamic sukuk distributed throughout the world. "This is the second largest project for Jadwa in the Kingdom and we'll focus on projects in the Kingdom which is currently going through an economic boom," Al Khateeb said, and added that Jabal Omar is the largest financing provided by Jadwa .

" Jadwa Investment , which was established two years ago and has a capital of SR6 billion, intends to finance large-scale projects in the Kingdom and provide companies with financial consultancy services. Our first project was with Saudi Aramco," Prince Faisal said.

Speaking to reporters after signing the agreement, Faqeeh said the pact was in line with a decision taken by his company's board of directors. "We have reached an agreement with Jadwa on arranging the necessary funds worth SR12.4 billion to implement the project in two phases," he said, and added that the funding complied with Shariah regulations.

Faqeeh said the agreement reflected Jadwa 's confidence in Jabal Omar Company , and added that Jadwa based its decisions on financial and market studies. He praised Jadwa 's expertise, and its distinguished methodology and team of professionals.

Al Khateeb said the Riyadh-based company has 150 professionals and four branches. He added that the agreement with Jabal Omar was for 18 months. Earlier, Faqeeh said that the construction of Jabal Omar project will be completed within 30 months. The plan includes a number of residential towers and 40 hotels. "Speed is a vital factor for us, as more than 200 hotels have been demolished in order to implement the Jabal Omar project," he said. He added that the project would also build a mosque to accommodate 10,000 worshippers and also a conference hall overlooking the Grand Mosque with a seating capacity for 2,000 people.

The project is located in a mountainous area close to the Grand Mosque. The towers will accommodate 34,500 pilgrims. "The project is being developed in areas around the Grand Mosque," Faqeeh said, and added that the new project would cover 230,000 sq. metres.

It will create a model residential and commercial centre with new roads, pathways, tunnels, electric stairs, and other facilities. The project will create prayer areas for 78,000 worshippers and will be linked to the Grand Mosque's sound system. "These prayer areas could be considered an indirect expansion of the mosque," Faqeeh said.

The project has taken into consideration the environment and the topography of the area. The groundbreaking for the second largest project after the Haram expansion was started two years ago. "It was a race against time to sign many agreements with various companies for utilities such as telephone, water and sewage system to simultaneously serve 45,000 pilgrims," he added.

Meanwhile, with the start of the summer holidays in the Kingdom and the neighbouring countries, huge numbers of people have begun flocking to Makkah and Madinah to perform Umrah and visit the Prophet's Mosque, thus highlighting the need for accommodation for the growing number of pilgrims.

As the summer holidays this year also include Ramadan, government departments in the two cities have made preparations for enormous numbers of pilgrims. Most hotels and furnished apartments in the two holy cities are fully booked. The problem with accommodation is compounded by the demolition of buildings in the eastern and northern side of the Grand Mosque to make way for an expansion of the courtyard surrounding the massive prayer complex.

"It has become very difficult to find accommodation in the central area of Makkah," said one foreign pilgrim, and added that prices have gone up to astronomical levels. Rooms at five star hotels for one week near the Grand Mosque now cost SR30,000. Despite the increase in charges, all five-star hotels in the city are fully occupied.

A real estate expert said that there is a shortage of hotel rooms in the city, as many small hotels in the Jabal Omar, Shamiya, Gazza and Harrat Al Bab areas have been razed. In Madinah occupancy rate at hotels and residential apartments located near the Prophet's Mosque has reached 97 per cent.

The prices of residential units currently range from SR150 to SR500 per night; hotels are charging between SR350 and SR2,000 per night.

(By our correspondent)

© Khaleej Times 2008