Which city has the most expensive real estate in the world? Mecca
Mecca has proved that it is an exceptional case in the suffering real estate market in the Middle East, thanks to the increasing numbers of persons interested in the rituals of Hajj and Umrah in the city, causing a boom in hotel construction.
Real estate experts say that the price of a square meter in the commercial area around the holy city, can be up to 375 thousand riyals ($100,000), making it one of the most expensive – if not THE most expensive – city in the world.
A report published in the Saudi newspaper “Al-Yawm” stated that more than 2.5 million pilgrims go to Mecca each year to perform Hajj rituals. Luxurious hotels, residential tall buildings and commercial skyscrapers are casting their shadows on the Grand Mosque.
Shoujaa Zaidi, Vice President of Project Management and General Manager of Makkah Hilton Hotel and Towers, says: “Mecca is now at its peak.”
A “forest” of tall buildings has emerged next to the holy mosque, built by the Jabal Omar Development Company; it cost more than $5.5 billion dollars. Hilton will soon open its doors there, along with 26 other new hotels, adding 13 thousand additional rooms to the city.
Mr. Zaidi said: “There is no doubt that these hotels will be fully booked... the growth of the entire Muslim population justifies the expansion.”
Banque Saudi Fransi (BSF) says that the investment of the government and real estate development companies in Mecca and Medina, is estimated to reach $120 billion dollars over the next decade. In Mecca alone, projects worth $20 billion are currently under construction.
Marriott International and Hyatt International declared their intention to manage and operate the hotels built by Jabal Omar Company.
All this is expected to increase the capacity of receiving Mecca pilgrims by at least 50 percent, over the next 10 years.
An expert in Mecca and Medina issues, Sami Ankawi, residing in Jeddah, says: “Both Mecca and Medina are almost perfect historically. You cannot roam in the central area and only find skyscrapers.”
The Mecca Clock Royal Tower overlooks the city; it is the largest of its kind in the world, a towering hotel facing the “Kaaba.”
Traditionally, Mecca provided the visitors with accommodation consisting of small rooms with basic facilities for ritual ablution and comfort, without any other service. Visitors were considered as temporary residents for short periods and some even stayed in private homes in Mecca in exchange for a modest fee.
Nonetheless, all this changed over the past few years when international and regional hotel operators arose in Mecca.
The famous luxury hotels started to provide 24-hour service for tourists and pilgrims.
Dubai-based companies “Emaar” and “Damac” as well as “Arabtec” and “Drake & Scull” are keen to enter the Saudi market.
These companies, as well as competitors from Qatar, Kuwait and Egypt have perceived that the success in Mecca would help them enter the large Saudi market, which experiences a severe shortage of housing due to the Kingdom’s population growth. Saudi Arabia currently has a population of 29 million.
Zeina al-Tabari, Executive Director of “Drake & Scull” said: “The majority of our in-progress contracts, representing about 50 percent are estimated to reach AED7.5 billion ($2 billion) in Saudi Arabia.”
She added: “We bid on many projects in Jabal Omar and around Mecca. We expect a huge rise in Saudi Arabia.”