Jabal Omar Project: facilitating Pilgrimages and religious tourism in Saudi Arabia

December 6, 2017 in Construction

The Jabal Omar Development Company (JODC) are introducing a capable and modern property sector to the city of Makkah.

The city of Makkah is considered the holiest site for Muslims all across the world, due to the presence of the Al Haram Mosque, which contains the Kaaba.

Worshippers are required to perform Hajj in Makkah at least once in their lives.

With a Muslim population that exceeds 1.3bn worldwide, there is always a demand for hotel rooms in Makkah. Most of the rooms are sought by Pilgrims of Islam. During the particularly busy periods of Ramadan and Hajj, hotels reach their maximum occupancy very quickly. In response, JODC have developed a new mix of commercial and residential properties.

40 new tower blocks are in construction, with several blocks already completed. The super structures will reach up to 20 storeys high, and promise to offer 11,454 hotel and residential rooms to over 160,000 people.

The residential site will also feature a mosque of 14,0000 sqm that can hold up to 150.000 people at a time.

520 restaurants will open, and 4,360 commercial and retail units will be fully operational by the end of 2019. Hundreds of these units have been leased already.

In addition, a conference hall, numerous public parks and a 10,000-space car parking lot will be developed.

The project is located in the center of Makkah Al Mukarramah to the West of the Grand Mosque; the site of the project is bordered by Umm Al Qura and Ibrahim Al Khalil roads to the North and East respectively. The Areas of Dahlat Al-Rushad and Al Hafayer border the Site from the South and West.

The site will contain multiple air-conditioned plazas large enough for 100,000 worshippers when finished. There will also be open courtyards that will accommodate up to 120,000 people.

Yasser Faisal Al-Sharif, CEO of Jabal Omar Development Company, spoke to the Business Year about the scale of the project. He said:

“The largest expansion of the Grand Mosque is underway in Islamic history. The plan as per the vision includes increasing the capacity to 30 million pilgrims and Umrah visitors in the coming years. Our projects seek to serve these pilgrims by not only accommodating them in our hotels or apartments but also introducing them to the Saudi and Islamic heritage through our different cultural elements.”

“The total construction area will increase to 1.66 million sqm, compared to its previous size of 1.17 million sqm. Jabal Omar will take advantage of this increase to introduce new development concepts across those phases in order to add architectural and financial values and achieve the company’s growth strategy.”

The large-scale project is being completed in stages. Stage 1 focused on large hotels: Six were built for Hilton Worldwide and three each were built for Marriott, Starwood and Hyatt.

The CEO spoke to Business Year about this stage. He said:

“We completed Phase I of the project in 2Q 2017 with the opening of Jabal Omar Hilton Convention. Offering more 2,700 five-star rooms, shopping malls located on Ibrahim Al Khalil Street, and the largest convention center in Makkah.”

Considering the arrival of more hotels in the near future, Mr. Al-Sharif then said:

“We will soon announce the launch of Al Bawaba-Jabal Omar, which is a hotel operated by a five-star operator, allowing buyers to invest in what is arguably the best investment on earth, based on real estate fundamentals.”

This is not a unique situation; The Jumeirah Group will also operate a luxury hotel called the Jabal Omar Jumeriah Makkah Hotel, which is within walking distance from the holy mosque. It is comprised of four towers that offer breathtaking views of Masjid-al-Haram. The hotel will include 1,033 guest rooms along with 93 villas and will feature a variety of food and beverage offerings, meeting facilities, executive lounge, gymnasium and over 90 retail units throughout the complex. It will open in early 2019.

Other project phases include the contracting and construction of 208 residential villas, the construction of a set of twin towers (completed in 2016), and the continued leasing of shops in the commercial areas.

The project is working complicity with Saudi Arabia’s ‘Vision 2030’ scheme. The scheme involves diversifying the economy away from oil dependency and public sector domination by the target year of 2030. Yasser Faisal Al-Sharif told the Business Year:

“JODC is a strong supporter and partner of Vision 2030 and Makkah in general, especially when it comes to the Hajj and Umrah. JODC coordinates its efforts closely with the Makkah Region Development Authority. Vision 2030 includes a strategic plan to develop the sector to allow the largest number of Muslims possible to perform Hajj and Umrah.”

The CEO assured the integrity of the project, in regard to policy, sensitivity of the local area, and design. He said:

“The JODC Board of Directors and management take into consideration the sensitivity of the location and consider sharia compliance in all situations.”

“We strive to maintain the touch of our local culture in the architecture of Jabal Omar project.”

“Foster + Partners won the competition for a new tower complex with a superbly contextual design that fully respected the sanctity of Islam’s most holy site.”

Foster + Partner’s senior executive Luke Fox told Dezeen.com: “[Makkah] as the home of the Holy Kaaba – the holiest site in Islam – presents a special challenge and honour for any developer and architect.”

“Our design sets out to create an innovative building form that will be respectful to the scale and importance of the Grand Mosque.” This includes a ramp integrated with the topography of the site, that will take pilgrims beneath a series of large pillars. The pillars branch outwards as they reach towards the ceiling. Natural light will flood these pillar-filled spaces through patterned metalwork that is intended to heighten the experience of visiting the Grand Mosque.

Yasser Faisal Al-Sharif added:

“We worked closely with the architects to achieve a design solution founded on providing guests with “luxury with humility.”

In addition, JODC have complied with environmental targets, sourcing high quality, energy efficient cooling systems for their new buildings. The company has enlisted the help of SNC-Lavalin to implement district cooling solutions that are 40% more energy efficient than traditional air conditioning systems are: an economical and sustainable choice for warm climates such as Saudi Arabia. The facilities will have an ultimate capacity of 55,000 refrigeration tonnes (RT) (193 MW), and will include a 1.5-kilometre dual chilled water distribution pipeline and 10 energy transfer stations. The first phase alone will have an installed capacity of 25,000 RT (88 MW), enough to serve 37 hotels and apartment buildings in Mecca.

SNC were awarded a contract by the Central District Cooling Company for the design, procurement, construction and commissioning of district cooling facilities in 2012.

Other companies working with JODC include Emaar Hospitality Group for hotel design, Nesma and partners for oil, gas, and power, and STC for telecoms and IT. JOCD has recruited qualified and leading personnel locally, regionally and internationally in order to provide an attractive working environment that will lead to creativity and innovation. The company’s CEO said:

“Jabal Omar is a great contributor to the economy of Makkah and, more specifically, in creating jobs for local citizens.”

Since the project’s inception, 20,000 people have been employed, either directly or indirectly.

The Jabal Omar development is expecting to witness stable growth rate during the coming years. Founded in 2006 with SAR9.2 billion in capital and a current market cap of SAR60 billion, Jabal Omar is the sixth-largest company on the Saudi Stock Exchange. Furthermore, the shareholders include “government entities, charity foundations, large institutional investors, as well as high-net-worth individuals, a base that gives JODC a distinct advantage to attract international and regional operators”, according to the CEO. “This in turn allows us to consider our strategic position and prepare for the future” he added.

Considering building costs, Jabal Omar’s healthy profitability will provide further support to finance its final project phases.

Yasser Faisal Al-Sharif said:

“We always aim high; our strategy is to be the national, world-class urban developer. Our strategy has proven successful this year, and we registered the highest profit in our history and in record time.”

The JODC said:

‘We believe the rising share of revenues from long-term lease for some Tower hotels, residential units (villas) and commercial shops will provide the necessary counterbalance to support revenue growth’

Revenues from religious tourism is expected to reach SAR 230bn by 2020. Investment in Saudi Arabia’s travel and tourism industry increased by 6.7% in 2012, and will rise by 3.3% yearly over the next ten years to 29.5 billion riyals in 2022.

JODC have matched these positive looking trends with commendable earning results for the June 2017 period. In this period, the company reported a net profit of SAR 53.79 million compared to SAR 9.49 million for the same period a year ago. Operational profit was SAR 114.93 million compared to SAR 48.4 million for the same period a year ago. Earnings per share was 0.06 riyals compared to 0.01 riyals for the same period a year ago.

Mr. Al-Sharif also said that earnings were bolstered by the company’s efforts to diversify its revenue beyond income generated from its hotels in Mecca to include shopping malls and residential units.

Securing foreign investment continues to be a significant part of financial success, and not exclusively for the Jabal Omar project. On speaking to the business year, CEO of JODC said:

“Foreign investment is a cornerstone of driving the Saudi economy to the next level. Direct international investments, considering compliance, will drive demand in the real estate markets and enhance liquidity and contribute to the overall growth of non-oil sectors such as residential, hospitality, and retail. In addition, such foreign investment can also contribute to an array of real estate assets and portfolios across Saudi Arabia.”

With a rise in religious tourism and an increasing volume of Muslims visiting Makkah, Pilgrims can expect that the Jabal Omar complex will give them the space, facilities and resources that they need.

An electronic sign board that overlooks the Central Area of the Grand Mosque in Makkah has been recently erected to count down the days to the development’s opening.