The Capital Market Authority in Saudi Arabia has reversed a previous circular prohibiting non-Saudi’s from investing into real estate funds holdings assets in Makkah and Madinah. Following the issuance of a new circular by the Capital Market Authority, GCC nationals and foreigners alike, be they individual investors, companies or funds, can now invest into real estate assets in Makkah and Madinah through a Saudi Arabian domiciled, CMA regulated real estate fund. This new circular applies to all types of real estate funds, whether they be development funds, private or public funds, or REITS, and is broad enough to cover both income generating assets, development projects, renovations, redevelopments and the like.
Individuals who hold a special privilege iqama are also allowed to acquire a 99 year usufruct right to real estate in Makkah and Madinah for their personal use.
Draft legislation is in circulation which, if enacted, would allow legal entities (not individuals) to invest in the development of land on a 99 year usufruct right, acquire commercial real estate assets (including hotels) on a 99 year lease and develop and hold residential real estate on a 99 year usufruct right.
