Um Al Qura for development and construction moves forward with IPO on Tadawul

Um Al Qura for Development and Construction, the developer behind one of the largest projects in Mecca, has announced its plan to proceed with an Initial Public Offering (IPO) on Saudi Arabia’s Tadawul stock exchange. The IPO is expected to involve the issuance of new ordinary shares representing 9.09% of the company’s total shares post-capital increase, according to a statement on Tadawul.

The company has appointed Albilad Investment Company as the IPO lead manager, with Albilad Investment, GIB Capital, and Al Rajhi Capital serving as financial advisors.

Additionally, Albilad Investment, GIB Capital, Al Rajhi Capital, and Alinma Investment have been designated as institutional bookrunners and underwriters for the IPO. The company had secured regulatory approval for the listing in December 2024.

This approval remains valid for six months, and the IPO must be completed within this period to avoid expiration. On December 24, 2024, the Capital Market Authority (CMA) approved the company's registration of 130,786,142 ordinary shares, representing 9.09% of its post-capital increase shares, which were issued through a capital raise.

Additionally, on December 8, 2024, the company received conditional approval from Saudi Tadawul to list its shares on the Main Market.

The net proceeds from the IPO will be used to finance property compensations, infrastructure costs, the development of Masar Destination, financial and operational expenses, and general corporate purposes, including sales, marketing, administrative, and operational costs.

Founded in 2012, Um Al Qura for Development and Construction was established to develop the King Abdulaziz Road project in Mecca, which involved the redevelopment of six informal settlements. The area is now known as Masar Destination.

The company’s current shareholders primarily include government institutions and private Saudi companies, such as the Public Investment Fund (PIF), the General Organization for Social Insurance (GOSI), and Dallah Al Baraka Holding.

A major urban redevelopment project

Masar Destination is one of the largest urban redevelopment projects in the region. Located on the western side of Mecca, it spans 3.5 km, extending from the Third Ring Road intersection with Mohammed bin Salman Road (formerly Umm Al Qura Road) to 550 meters from King Fahd Gate of the Grand Mosque.

The project consists of 205 investment plots covering 641,000 square meters, with a total Gross Floor Area (GFA) of 5.7 million square meters. Hotel apartments make up 31.6% of the total GFA, offering 18,000 keys across 1.8 million square meters.

Hotels account for 31.1% of the GFA, with 23,000 keys over 1.8 million square meters. Residential units comprise 29.3% of the total GFA, with 9,000 units to be developed and sold. Retail spaces represent 5.7% of the GFA, covering 330,000 square meters, of which 216,000 square meters are leasable.

Masar Destination will include three shopping centers, one on the west side and two on the east, with additional retail outlets distributed along the pedestrian corridor.

The development will also feature a major hospital, a large central mosque, office spaces, and other complementary services. Upon completion, Masar Destination is expected to include over 50,000 residential and hospitality units, with a total development value estimated at SAR 100 billion.