Indonesia’s sovereign investment fund Danantara has completed the acquisition of a hotel and 14 development plots in Makkah for approximately SAR2 billion ($533 million), paving the way for a hospitality and commercial investment programme exceeding SAR6 billion. The transaction marks an early major test of Saudi Arabia’s revised foreign property ownership framework.
The acquisition follows a strategic agreement signed with Thakher Development in December 2025. Danantara took possession of the 1,461-room Novotel Thakher Makkah on 11 August 2026 and completed the purchase of 14 adjoining plots, covering 44,088 square metres, on 18 October.
Ammar Baroum, chief executive of Saudi development partner Al-Khomasiah Group, told Asharq Bloomberg that the investment comprises approximately SAR1 billion for the hotel, more than SAR1 billion for land acquisition and around SAR4 billion earmarked for subsequent development.
The expansion envisages approximately 4,700 hotel rooms, a shopping complex and supporting facilities. Thakher Development separately outlined potential capacity of about 6,000 additional rooms and more than 90 retail outlets, indicating that the project’s final development scale remains subject to confirmation.
The transaction follows Saudi Arabia’s revised property ownership law, which took effect on 22 January 2026, establishing a regulated framework for foreign investment while maintaining specific ownership restrictions in Makkah and Madinah.
For Indonesia, the acquisition offers greater long-term control over accommodation serving its substantial Hajj and Umrah pilgrim population, reducing reliance on seasonal hotel rentals while creating potential recurring hospitality revenues.
For Saudi Arabia, the investment supports Vision 2030’s target of attracting 30 million international Umrah pilgrims annually by 2030 and demonstrates the potential for foreign institutional capital to finance religious tourism infrastructure.
The completed acquisition provides an operating hotel and land for expansion, but the remaining development expenditure depends on feasibility studies, regulatory approvals and phased construction. Ultimately, returns will depend on occupancy, development costs and competition as Makkah’s hotel capacity expands.
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