Saudi Arabia's Jadwa REIT Al Haramain has doubled its portfolio with two new properties in Makkah (also known as Mecca).
According to a statement on the Saudi stock exchange, the sharia-compliant real estate trust fund, managed by the investment management and advisory firm Jadwa Investment, bought the properties for a combined value of 148 million riyals ($39.5 million).
“The acquisitions are a continuation of Jadwa REIT Al Haramain’s strategy to create value to its unit-holders by expanding its real estate portfolio into value add assets that benefits from the strong fundamentals of the two holy cities,” the company claimed in the statement.
Jadwa REIT bought a hospitality development close to the Grand Mosque in Makkah, primarily used for Haj and Umrah pilgrims for 125 million riyals, which will be financed through an existing Islamic debt facility.
As new financial regulations allow REITs to trade on Saudi Arabia's stock exchange, several real estate companies and investment houses have set up new trusts. The Jadwa REIT Al Haramain Fund launched in mid-April this year as part of the government’s Vision 2030 initiative that will promote religious tourism with the aim to double the number of Hajj and Umrah pilgrims by 2020.
“We are expanding our real estate offering to help our clients benefit from the expected growth in religious tourism in the Kingdom. The REIT will look to add more attractive properties in Makkah and Madinah in the near future,” Tariq Al Sudairy, managing director and CEO of Jadwa Investment, said at the time.