Gulf Construction Online - $7bn Thakher Makkah on track: CEO

Makkah & Madinah

Thakher Makkah Development, a 320,000-sq-m mixed-use project, located 1 km from the Grand Mosque.

$7bn Thakher Makkah on track: CEO

01 September 2024

Thakher Makkah Development, a SR26-billion ($6.92 billion) project that aims to transform the real estate landscape of Makkah, has continued to make steady progress over the past year, according to the company that is spearheading the massive development.

In an exclusive interview with Gulf Construction’s Bina Goveas, Thakher Development Company CEO Eng Abdulaziz bin Saleh Al-Aboudi says the 320,000-sq-m mixed-use project, located approximately 1 km from the Grand Mosque, is on track to meet its anticipated completion date.

The current completion percentage stands at 62.2 per cent, with infrastructure having crossed the 80 per cent mark for Phase One.

Thakher Makkah Development also aims to boost the hospitality facilities in Makkah with 42,000 hotel rooms. Upon completion, the project will comprise about 100 land plots for hotels, residential, commercial, and service-related areas.

The project’s infrastructure facilities include road network, tunnels, sidewalks, landscaping and 10,000 car parking lots.

Eng Al-Aboudi ... the company has achieved several milestones.

Despite challenges posed by global markets, the Covid-19 pandemic, and supply chain issues, the project has remained on schedule, Eng Al-Aboudi says. The company has successfully completed the Novotel Hotel and Novotel Residences, as well as the Park Inn Hotels (West and East). The Radisson Residence is approximately 80 per cent complete and Thakher Development Company reports that it has sold 75 per cent of the residences within the development.

In terms of milestones, Thakher Development Company has commenced handover of units within Novotel Residences Makkah to buyers.

In addition, the master-developer has also entered into a SR2 billion agreement for the development of the Thakher Garden project with Tatimah Capital.

Thakher Development Company has also awarded three construction contracts totalling over SR35 million over the past year, covering electric car charging stations, rainwater drainage network, and an electric voltage network.

The development is already enjoying success, having recorded full occupancy across all hotel rooms during this Hajj season 1445H (June 15 to 19).

Eng Al-Aboudi emphasises the project's alignment with Saudi Vision 2030, which aims to diversify the economy and enhance the pilgrimage experience.

As the project nears completion, Thakher Development Company is confident in its ability to deliver a world-class development that will benefit the local community, pilgrims, and visitors alike.

A shopping centre within Thakher Makkah Development will contain 124 outlets.

Excerpts from the interview with Eng Abdulaziz bin Saleh Al-Aboudi:

What are the unique selling points of Thaker Makkah Development? How does the project align with the Kingdom of Saudi Arabia's Vision 2030?

Thakher Makkah Project is located approximately 1 km from the Great Mosque (Haram), and also provides easy access to the holy sites. Its strategic location and connections to the most important highways enable investors and visitors, including pilgrims, Umrah performers and general visitors to Makkah, to reach the Holy Masjid (Haram) within one hour from King Abdulaziz International Airport in Jeddah.

The project aligns with the ambitious Saudi Vision 2030, which aims to diversify the economy and promote sustainable development. Thakher Makkah project also contributes to Vision 2030, which aims to host 30 million Umrah performers and six million Hajj pilgrims by 2030. The project contributes to achieving the objectives of Vision 2030 by enhancing the services provided to pilgrims and enriching their experience.

Additionally, the project has obtained all building permits for all land plots, as well as the off-plan sales permit from the Wafi Off-Plan Sales and Rent Committee in the Saudi Ministry of Municipal and Rural Affairs and Housing. We have also obtained a total of 35 title deeds for Phase One.

Finally, we are implementing projects on the ground, operating them, and delivering the purchased units to buyers.

What is the current completion percentage of the project?

The current completion percentage of the project is as follows: Infrastructure has achieved 80.16 per cent for Phase One and overall project 62.2 per cent. The Novotel Hotel and Novotel Residences are both 100 per cent complete, as are the Park Inn Hotels (West and East). The Radisson Residence is approximately 80 per cent complete.

Has the project timeline been affected by any challenges or external factors?

The project timeline has been impacted by some challenges like global markets, Covid-19 pandemic and the ongoing supply chain issues. However, the project remains on schedule, and we are committed to delivering on time.

Please provide an update on the progress of Phase Two of the project, including specific milestones achieved and challenges faced.

Our success is measured by achieving major milestones, and the project is progressing well, in line with the expectations of investors and visitors alike, including pilgrims and Umrah performers.

Over the past 12 months, the company has achieved several significant milestones in the development of the Thakher Makkah project. The company successfully commenced the handover of Novotel Residences Makkah units to buyers on schedule, without any delays.

Additionally, we launched the Radisson Residence project, achieving over 75 per cent sales of the units and signed a landmark agreement for the Thakher Garden project, valued at over SR2 billion, in collaboration with Tatimah Capital.

Furthermore, the Hajj season 1445H was a success, with full occupancy across all hotel rooms in Thakher Makkah Project. Lastly, the company celebrated the official opening and operation of the Park Inn Hotel in the project.

Park Inn by Radisson Thakher Makkah Hotel received the permit to host pilgrims during the Hajj. This achievement marks a significant milestone for the Thakher Makkah project, which holds great importance as a prominent tourist destination in the Holy City.

What is the value of construction contracts awarded to date on Thakher Makkah Development?

In the past 12 months, Thakher Development Company awarded three construction contracts for its projects, with a total value exceeding SR35 million. These contracts include the installation of electric car chargers, valued at more than SR152,000; the construction of a rainwater drainage system and network, valued at over SR13 million; and the development of an electric voltage network, valued at more than SR22 million. These investments reflect the company’s ongoing commitment to enhancing infrastructure and services within the projects.

Could you provide a breakdown of the project components, including the number of residential, commercial, and hotel units?

Spanning over an area of 320,000 sq m, Thakher Makkah project’s various facilities make it one of the most comprehensive real estate projects in Makkah. The project also aims to contribute to raising the level of accommodation services in Makkah, while creating an attractive and sustainable environment for both businesses and the community by providing more than 30,000 jobs.

The project infrastructure facilities include hotels, road network, sidewalks, landscapes, as well as shopping areas, restaurants, and cafes. A shopping centre within the project will contain 124 international and local brand stores, and offer various options for shoppers, including entertainment centre for children, cafes and restaurants from different international cuisine. The project, which provides up to 10,000 car parking lots, contains a mosque that accommodates 5,000 prayers.

Upon completion, it will include about 100 land plots of various uses for hotels, residential, commercial, and service-related areas. Residential and hotel apartments units will be available in various categories, and the units will be also available for free-hold ownership. The international hotels in Thakher Makkah include the Radisson Hotel, the Park Inn by Radisson, and the Novotel Hotel, the largest in the world in terms of rooms number.

What is the estimated economic impact of the Thakher Makkah Development on the local community and the kingdom as a whole?

The Thakher Makkah Project is set to boost the local economy by generating many direct and indirect employment opportunities, as the project is expected to create over 30,000 direct and indirect jobs, contributing to Saudi Arabia’s economic growth and providing a wealth of opportunities for local talent. The project aims to promote the city's real estate and economic development and facilitate those wishing to own a unique property in an integrated community with a vibrant and safe environment, proximity to the Great Mosque, and valuable services.

Additionally, the project will include 42,000 hotel rooms, which will provide exceptional options and opportunities for visitors, including pilgrims, Umrah performers and general visitors to Makkah.

What sustainability initiatives are being implemented in the Thakher Makkah Development?

Thakher Development Company prioritises sustainable development by integrating environment-friendly practices into the construction processes of Thakher Makkah project. This includes using energy-saving standards, implementing waste reduction practices, and reusing cut rocks to pave roads within the project. The company has also conducted and implemented studies to harvest water related to Zamzam in Wadi Ibrahim, re-injecting it into the ground while ensuring no contamination of the Zamzam water.

Additionally, the company has increased green spaces by planting local plants along roads to reduce irrigation water usage. Furthermore, the project will include public transportation stations, bicycle lanes, electric vehicle charging stations inside buildings and along roads, and solar-powered street lighting have been added to make commuting within the project easier for visitors and more sustainable.

What are the primary challenges the project is currently facing, and how are they being addressed?

Due to the religious and cultural significance of the Holy City of Makkah, it has more stringent regulations for infrastructure and real estate development compared to other areas in the Kingdom of Saudi Arabia. The need to balance religious, cultural, and logistical considerations with modern development goals requires careful planning and innovation. Therefore, it is crucial for us to stay up-to-date, continuously study the market, and adapt to these challenges to ensure the growth and continuation of our project.