Giant Makkah real estate project gets green light

JODC signs construction contract on vast $8.8bn mixed-use site near Grand Mosque
Saudis JODC owns a 230,000 square metre plot in the holy city, and is planning a vast $8.8bn mixed-use development
By Ed Attwood
Wed 29 Dec 2010 12:55 PM

The
developer behind one of Saudi Arabia’s most prestigious real estate projects
has confirmed a deal that will finally allow work in front of the Grand Mosque
in Makkah to be completed.

On
Tuesday, Jabal Omar Development Company (JODC) confirmed in a statement made to
the Saudi stock exchange that it had awarded a $906m to Nesma & Partners
Construction to restart work onsite.

Construction
contracts were initially handed out to Saudi Oger and Saudi Binladin, with work
beginning onsite in July 2008, but both firms have cited funding difficulties
and are requesting fixed-costs given the delays on the project. 

Nesma
will now complete the work started by Saudi Oger and Saudi Binladin.

JODC
owns a 230,000 square metre plot in the holy city, and is planning a vast
$8.8bn mixed-use development that will include the construction of 39 residential
and hotel towers.

However,
the project has been beset by several delays. JODC initially raised $537m by
selling a 30 percent stake in the company via an IPO in November 2007. 

The
company then cancelled its contract with Jadwa Investment after the latter
failed to secure $3.3bn in project financing for the Makkah project.

JODC
then signed up a subsidiary of Al Rajhi Bank to help with financing.

In
September this year, the company obtained a $360m bridging loan to help build the
project.

 

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