The cost of premium residential property in Makkah is five times higher than that of Jeddah and outperforms even that of Hong Kong – known to have some of the most expensive real estate in the world, according to previously unreleased data.
CBRE Middle East compiled real estate figures for Saudi Arabia’s third biggest city, which show that the average premium sales rate for residential property in Makkah is SR110,000 per square metre (/m2), ($27,300/m2), compared to SAR22,000/m2 ($5,865.m2) in Jeddah.
Residential pricing in Makkah is double the Middle East prime average, which stands at SR46,000/m2 ($12,265).
And it even outperforms Hong Kong, which achieves sales rates of up to SR90,000/m2 ($23,996/m2), according to the data seen exclusively by Arabian Business.
CBRE Middle East research and consultancy director James Lynn added that the premium offer was likely to be replicated in Makkah’s hotel sector.
From 2017 to 2022, more than 35,000 hotel rooms are expected to enter Makkah’s hotel market, according to CBRE’s data, with a significant proportion of these rooms located in the premium hotel segment.
Five-star hotels are expected to constitute close to 60 per cent of total hotel offering, up from 44 percent today.
High forecast growth in the number of religious pilgrims visiting Makkah is behind a projected 80 percent rise in hotel supply in the city by 2022, CBRE added, as the number of Haj and Umrah pilgrims grows to a forecast 30 million by 2030. Six million pilgrims visited Makkah last year, according to official statistics from the kingdom.
Lynn said Makkah’s current hotel supply stands at approximately 45,000 rooms across more than 110 operational hotels.
“This figure is expected to grow exponentially by 2022 with an 80 percent growth in the number of rooms coming online,” he said.
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