Delivering value in the Holy City

As an urban destination, created with a vision of future investment and development, Masar is a modern landmark in the Kingdom of Saudi Arabia. Developed with multiple capabilities and features in mind, the project differs from other urban development projects in the Kingdom due to its spatial and spiritual significance in proximity to the Holy Mosque in Makkah, and its linkage to Saudi Vision 2030 through the Doyof Al Rahman and Quality of Life programs, which respectively enhance the experience and ability of Hajj and Umrah; and improve the lifestyle of Makkah’s residents.

The project reinforces the importance of driving a major shift in the investment landscape and providing more diverse options to enhance the quality of life for Makkah’s residents and pilgrims, while facilitating their access to the Holy Mosque – in line with the directives of the Kingdom’s leadership to attract 30 million pilgrims by 2030.

Speaking exclusively to Big Project ME, Yasser Abuateek, the CEO of Umm Al Qura for Development and Construction, the developer behind Masar, says that the project will provide wide-ranging investment opportunities in sectors such as hospitality, foods and beverages, accommodation, and transport. The offerings will be in line with standards that enrich pilgrims’ experiences and fulfil modern-day needs.

“Our priority is to create added value for Masar and build more flexible and sustainable innovative models with investors, to enhance the quality of life for Makkah residents and visitors,” he says

“The project began with the issuance of Royal Decree no. 6258/MB stipulating the development of the King Abdulaziz Road in Makkah. As soon as it was issued, Umm Al Qura for Development and Construction (UAQ) began developing the project by surveying the properties of the six neighbourhoods located on the project land, paying compensations, and starting the infrastructure works.

“The idea was to create a destination that considers the urban and economic ecosystem, utilising an urban plan and design, and providing services that ensure the smooth movement of visitors for distinctive and diverse attractions experiences that take into account the culture and authenticity of Makkah Al-Mukarramah.”

Abuateek adds that the name ‘Masar’ was chosen because it’s easy to pronounce in all languages and expresses the concept of comprehensive mobility, on which the destination relies, as it includes several pathways that reflect the destination.

These include a 3.65-kilometer-long pedestrian boulevard, which sits in the middle of the main 80-meter-wide two-way road without intersecting with it, thereby representing the natural extension of the Holy Mosque plazas

Furthermore, the destination contains several tunnels, pathways, commercial centres, car parks, and tens of thousands of hotels and residential units. All of this is in addition to retail, cultural, and government centres and open public spaces.

By May 2021, Abuateek says that 65% of the infrastructure work was completed, with working currently at 68% completion.

“The core elements of Masar are the main pathway extending from the western entrance of Makkah, through Prince Mohammed bin Salman Road to the Holy Mosque Plaza, in addition to other pathways, such as the pedestrian boulevard, the metro, and the rapid bus transit network,” he explains.

“In addition, there are 205 development plots in total, with a land area spanning around 690,000 square meters. The aim is to build and operate 38,000 hotel rooms and 13,000 residential units through long-term investment channels, including 58 hotels, 59 residential buildings, 82 hotel apartments and several commercial centres.”

Distinguished by its strategic location at the centre of Makkah, Masar’s importance is highlighted by the adoption of a new concept in the modern destination industry, Abuateek says. This involves the professional application of the latest strategies to develop model destinations, while establishing a solid infrastructure for 100 years to come.

“The destination’s urban plan and design comprises multiple and diverse options, including accommodation and shopping, and it provides several transportation modes between the destination’s amenities and the central area of the Holy Mosque,” he elaborates.

“Building management in Masar has been integrated with a multifunctional system in the four car parks and the boulevard to control security services as well as the heating, ventilation, air conditioning, and fire alarm systems.

“The destination also includes several innovative technical systems that are all linked to the main data centre, covering all information technology and communications needs as well as the digital and innovative technologies that will be available in the destination. Space will also be provided for telecom service providers to offer their services throughout the destination.”

All these advancements and innovations make Masar an ideal investment option, Abuateek points out, while its strategic location, adjacent to the Haram, gives it great importance as the centre of the holy city of Makkah. This has been constant through the ages and will not change for another thousand years to come, he adds.

“The site plays an important role in making the destination of strategic importance from several considerations, including attractiveness and ease of access. This ensures the intensity of economic and social movement, and thus provide investment opportunities that are not available in other investment sites and last for hundreds of years.

“The site also adds to the promotion of long-term investment opportunities, which are concerned with the quality of human life, which is a priority, and is also not available in any other sites. What makes us different is that this destination focuses on the quality of life for both residents and visitors of Makkah.

“We are seeking investors who add the desired value according to the destination’s standards. For investors to be able to add this value, they have to be institutional investors. We have welcomed distinguished investors from many of the sectors in which we operate in, covering the health, accommodation, shopping, and entertainment segments so that services are offered with high quality. Therefore, we can say that we target everyone who helps create value according to the standards of the destination,” he explains.

According to the set plan laid out for Masar, investment opportunities will be presented in 2022. However, due to the high demand from those seeking to invest in the destination, UAQ has preceded the date announced in the plan with the signing of Memorandums of Understanding with several investors. Abuateek also reveals that the developer is continuing to hold discussions with other investors, with the expectation of implementing all IPO requests before the date mentioned in the plan.

He adds that many companies have expressed an interest in investing directly into the Holy City, but that they are waiting for the approval of regulations that will allow companies to invest directly in Makkah.

“Our focus is on the added value that the investor can provide in these sectors.  Therefore, we are keen on accommodating such added value by building more flexible and sustainable investment models that rely on innovation, whether in partnerships, long-term rentals, or other arrangements, in a way that benefits all parties involved.

“While there are no guarantees in investing, there are risk profiles which can either be high or low or medium. Even money market investments have some risk level associated with them. A long-term investment in the Masar destination is considered to have a low risk profile when the project’s location and its significance are taken into consideration.

“The strategic location of being in the heart of Makkah and within close proximity of the Kaabah (Al Haram) that has stood the test of time is something that won’t change for the next 1,000 years. This is contrary to other city centres that change materially as cities develop and grow, such as in Jeddah and Riyadh where centres change approximately every 15-20 years,” he points out, adding that this makes Masar an attractive investment for institutional investing that targets various sectors within a holistic investment ecosystem, with components supporting sustainable long-term returns.

Masar will be one of the key enablers of Saudi’s Vision 2030 through its support of the Doyof Al Rahman Program to receive 30 million pilgrims by the year 2030.

The vast number of visitors will require accommodation and transport services that the destination intends to cater for, Abuateek says.

“This vast number requires an elevated level of standard from what the city offered in the past. Visitor demographics have also changed along with their expectations and needs. And these requirements are closely associated with a higher standard of living and service that aren’t currently available.

“We are currently in the ideal time to invest in hospitality, accommodation, and mobility sectors, with an increased opportunity to offer new living concepts that cater to the next generation of pilgrims and visitors. This segment, and according to several studies, look for a higher standard of quality and environmentally friendly concepts and buildings.

“They also look to discover other tourist destinations that the Kingdom is working on as part of strategic initiatives embarked on by the Ministry of Tourism,” he outlines.

This confidence is backed up by the concrete interest shown by international hospitality companies such as Grand Hyatt, Kempinski, Hilton, Marriott, and Taj, who have already begun planning to implement their projects at the destination.

Furthermore, he states that as per set plans, the company’s IPO readiness will be complete in 2022.

“We are still preparing for the underwriting process. We haven’t yet finalised the decisions regarding IPO consultants or underwriting managers. However, we will announce the details once all arrangements are completed.”

With interest in Masar peaking across the globe, the scheduled delivery programme for the destination comes into sharp focus. However, despite the pressure, Abuateek is confident that everything is proceeding according to the timeline and plan in place.

“We are committed to achieving greater progress in the implementation of ongoing works this year, including the towers and complexes projects, which we will begin implementation during 2021.”

“Thankfully, we were able to overcome the challenges and difficulties of the coronavirus crisis, especially during the curfew period, during which the working hours were reduced as per the directives of responsible authorities. We have taken all necessary measures to ensure that the project’s implementation was carried out professionally while remaining fully compliant with the preventative and precautionary measures issued by the relevant entities,” he states with confidence, as he brings the interview to a close.