newmsite

Kuwaiti firm plans project in Makkah

A Kuwaiti closed shareholding company, Esdarat, with an authorised capital of around $377 million, announced on Tuesday the launch of a private placement of 600 million shares to fund its investment in the largest privately owned real estate development projects in the centre of Makkah, officials said.

By Gureni Lukwaro, Staff Reporter
00:01 June 25, 2008

Dubai: A Kuwaiti closed shareholding company, Esdarat, with an authorised capital of around $377 million, announced on Tuesday the launch of a private placement of 600 million shares to fund its investment in the largest privately owned real estate development projects in the centre of Makkah, officials said.

The project Rawabi Abraj Al Bait is being developed by Saudi Bin Laden subsidiary Al Makam.

The private placement, which is expected to raise over $300 million, is a Sharia compliant investment opportunity which offers investors attractive potential returns. An initial public offering of the company is expected to take place within 12-18 months.

According to Dr Saleh Al Habib, chief executive of Jiwar Real Estate Company, phase-1 of the project, construction of which will start within the next six months, will comprise nine towers close to Al Haram Al Sharif in Makkah with easy access to the holy site and it will be a 'build, operate and transfer' project for each tower for 30 years on the Islamic calendar, starting from the date which is two months from each tower's date of delivery.

The construction is expected to be completed within five years and a total area for Phase-I is estimated to be around 824,270 square metres with a leasable area of approximately 358,196 square metres providing 10,742 rooms split across 479 floors of hotel and residential space, said Al Habib adding that the total project cost is estimated to be just under 10.77 billion Saudi riyals.

The development will comprise a series of hotels, residences and commercial facilities situated in the Ajiad area, 170 metres from Al Haram Al Sharif.

"The Rawabi Abraj al Bait project that this transaction will partly fund, is unique on many levels, but more so because we are unlikely to see another development project on this scale in Makkah for sometime to come.

"Due to redevelopment of the Haram Mosque, some major projects in Makkah have been cancelled, which means this project is an even rarer opportunity," said Mohammad Al Shuaib, chief executive of Esdarat Holding.

Rare opportunity

"This is a rare investment opportunity, which is Sharia compliant and provides investors with exposure to the Makkah real estate sector.

"We have had a strong initial interest from investors across the Middle East, North Africa and South East Asia, and expect to close the transaction by the end of July. A team of syndicate banks has been appointed to cover Saudi Arabia, Qatar, Kuwait, the UAE, Malaysia and North Africa," said Shahzad Shahbaz, chief executive of NBD Investment Bank, an Emirates NBD company which is financial adviser and lead placement agent on the deal.

When complete, the vast Rawabi Abraj Al Bait development will consist of 30.8 million square feet of built-up area, with a total of 21 residential and hotel towers comprising 26,000 hotel rooms and will incorporate over 4,000 parking spaces.