Saudi fund approved to invest in Mecca and Medina

Saudi Arabia-based Jadwa Investment has set up the first listed real estate fund with approval to buy assets in the holy cities of Mecca and Medina.

The sharia-compliant Jadwa REIT Alharamain fund aims to raise 660 million Saudi riyals ($176 million) from retail investors before listing on the Saudi Arabian stock exchange in mid-April.

“This is the first REIT approved by the CMA [Capital Market Authority] that will invest in Mecca and Medina, into which real estate investment is highly regulated and heavily restricted,” said a statement by King & Spalding, the law firm that acted as fund counsel.

The Saudi regulator introduced listed real estate funds last year, stating that they must be closed-ended with a minimum size of 100 million Saudi riyals.

The products are called  real estate investment traded (REIT) funds, a variation on the more common global term, real estate investment trust.

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