1 00:00:02,720 --> 00:00:07,200 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:09,600 --> 00:00:14,000 Speaker 2: Mecca is a small hilly town that's been a holy 3 00:00:14,120 --> 00:00:19,000 Speaker 2: site for Muslims since more than one four hundred years. 4 00:00:19,079 --> 00:00:23,680 Speaker 3: Bloomberg zanem Fata says, fourteen hundred years later, this ancient 5 00:00:23,760 --> 00:00:27,280 Speaker 3: city has become one of the world's hottest property markets, 6 00:00:27,920 --> 00:00:29,160 Speaker 3: and it's getting even horder. 7 00:00:29,560 --> 00:00:32,920 Speaker 2: Mecca has the biggest hotel market in the entire Middle East. 8 00:00:33,320 --> 00:00:36,680 Speaker 2: Dubai has more hotel rooms than Las Vegas, and Mecca 9 00:00:36,760 --> 00:00:39,319 Speaker 2: has way more than that. More than half of all 10 00:00:39,360 --> 00:00:42,000 Speaker 2: of the hotel rooms are being constructed in Saudi Arabia 11 00:00:42,040 --> 00:00:45,839 Speaker 2: are actually being built in the cities of Mecca and Medina. 12 00:00:46,080 --> 00:00:49,280 Speaker 3: Zena, who covers business and economics in the Middle East, 13 00:00:49,640 --> 00:00:52,360 Speaker 3: visited Mecca late last year and found a city in 14 00:00:52,400 --> 00:00:54,320 Speaker 3: the middle of a major transformation. 15 00:00:56,960 --> 00:01:01,480 Speaker 2: You look around, there are cranes everywhere and a lot 16 00:01:01,480 --> 00:01:04,319 Speaker 2: of development because there are some large projects that the 17 00:01:04,360 --> 00:01:07,240 Speaker 2: government is starting to build and some of the government 18 00:01:07,319 --> 00:01:13,040 Speaker 2: related companies, and those are meant to basically upgrade that 19 00:01:13,240 --> 00:01:16,600 Speaker 2: offering of housing and hotels to kind of be able 20 00:01:16,680 --> 00:01:20,120 Speaker 2: to absorb that increasing number of Muslims who want to 21 00:01:20,120 --> 00:01:20,839 Speaker 2: come to Mecca. 22 00:01:21,440 --> 00:01:24,320 Speaker 3: Two point three million people live in Mecca year round, 23 00:01:24,600 --> 00:01:27,160 Speaker 3: and thousands more visit the city on a given day 24 00:01:27,720 --> 00:01:30,600 Speaker 3: to pray at the Grand Mosque and perform sacred rites. 25 00:01:31,440 --> 00:01:34,960 Speaker 3: During the Hajj, the annual pilgrimage that all Muslims are 26 00:01:34,959 --> 00:01:37,640 Speaker 3: supposed to take at least once in their lives, the 27 00:01:37,680 --> 00:01:41,119 Speaker 3: city's population nearly doubles to four million people. 28 00:01:41,640 --> 00:01:45,600 Speaker 2: It's a journey that's required for every able bodied Muslim 29 00:01:45,840 --> 00:01:49,160 Speaker 2: who has the financial means once in a lifetime. The 30 00:01:49,160 --> 00:01:52,680 Speaker 2: city almost has to swell overnight to kind of accommodate 31 00:01:52,720 --> 00:01:55,560 Speaker 2: that influx of humanity at one time. 32 00:01:55,680 --> 00:02:00,120 Speaker 3: Meaning Mecca real estate is always in high demand. For 33 00:02:00,160 --> 00:02:04,400 Speaker 3: a long time, Saudi Arabia prohibited foreigners from owning property, 34 00:02:05,200 --> 00:02:08,240 Speaker 3: but in an effort to overhaul the economy, Crown Prince 35 00:02:08,360 --> 00:02:12,320 Speaker 3: Mohammed ben Salman has been quietly loosening restrictions on foreign 36 00:02:12,360 --> 00:02:17,760 Speaker 3: investment and tourism, and now it's Mecca's turn. As of 37 00:02:17,800 --> 00:02:20,760 Speaker 3: this year, any Muslim buyer will be able to purchase 38 00:02:20,800 --> 00:02:25,399 Speaker 3: property in the Holy City, regardless of their nationality. Investment 39 00:02:25,440 --> 00:02:28,320 Speaker 3: will still be restricted for non Muslims who can't even 40 00:02:28,360 --> 00:02:29,040 Speaker 3: visit the city. 41 00:02:29,560 --> 00:02:32,720 Speaker 2: The pitch is come to Mecca you will be able 42 00:02:32,840 --> 00:02:35,800 Speaker 2: to have state of the art apartment. You're going to 43 00:02:35,840 --> 00:02:38,840 Speaker 2: have all the facilities. You're going to have a hospital nearby. 44 00:02:38,960 --> 00:02:42,120 Speaker 2: You're going to have a mall nearby. You're going to 45 00:02:42,160 --> 00:02:44,399 Speaker 2: be so close to the Grand Mosque you can walk 46 00:02:44,440 --> 00:02:46,880 Speaker 2: to the Grand Masque if you want. You'll have all 47 00:02:46,880 --> 00:02:50,160 Speaker 2: the facilities you want, but at the same time, you 48 00:02:50,280 --> 00:02:53,640 Speaker 2: will be in a place that is so unique that 49 00:02:54,000 --> 00:02:56,720 Speaker 2: you'll be able to rent your apartment if you want, 50 00:02:57,000 --> 00:02:59,440 Speaker 2: and at the same time to use it for personal use. 51 00:03:00,240 --> 00:03:03,560 Speaker 3: Has more than sixty billion dollars worth of projects planned 52 00:03:03,680 --> 00:03:07,000 Speaker 3: or under construction right now, according to estimates from the 53 00:03:07,000 --> 00:03:11,160 Speaker 3: business intelligence firm Need and All. This rapid growth has 54 00:03:11,200 --> 00:03:13,560 Speaker 3: come with trade offs for the people who live in 55 00:03:13,600 --> 00:03:15,880 Speaker 3: Mecca and the people who visit. 56 00:03:16,320 --> 00:03:18,880 Speaker 2: That is a lot happening there, and in many ways 57 00:03:18,919 --> 00:03:21,760 Speaker 2: it kind of makes you think about what is good 58 00:03:21,800 --> 00:03:25,000 Speaker 2: and what's what's kind of changing the city. It's almost 59 00:03:25,080 --> 00:03:26,160 Speaker 2: unrecognizable to. 60 00:03:26,160 --> 00:03:31,959 Speaker 3: Some I'm Sarah Holder, and this is the big take 61 00:03:32,000 --> 00:03:35,960 Speaker 3: from Bloomberg News today. On the show, Saudi Arabia changed 62 00:03:35,960 --> 00:03:39,360 Speaker 3: its rules on foreign investments and set off a property 63 00:03:39,440 --> 00:03:42,280 Speaker 3: gold rush in Mecca. What it means for the Holy 64 00:03:42,360 --> 00:03:46,560 Speaker 3: City for investors and for Saudi Arabia's plans to shift 65 00:03:46,640 --> 00:03:48,440 Speaker 3: its economy away from oil. 66 00:03:55,040 --> 00:03:58,280 Speaker 2: Mecca and Medina mean a lot to Saudi Arabia because 67 00:03:58,360 --> 00:04:01,800 Speaker 2: the King of Saudi Arabia is often referred to as 68 00:04:01,840 --> 00:04:05,440 Speaker 2: the custodian of the two Holy Mosques, and that carries 69 00:04:05,480 --> 00:04:07,800 Speaker 2: with a lot of political capital and a lot of 70 00:04:08,080 --> 00:04:10,560 Speaker 2: prestige and respect in the Islamic world. 71 00:04:11,040 --> 00:04:13,840 Speaker 3: And for a long time, there have been strict regulations 72 00:04:13,920 --> 00:04:17,040 Speaker 3: around who can visit and invest in Mecca. 73 00:04:17,320 --> 00:04:20,720 Speaker 2: Mecca was always off limit to any foreigner who is 74 00:04:20,760 --> 00:04:22,440 Speaker 2: in Saudi. You couldn't buy there. 75 00:04:22,920 --> 00:04:23,559 Speaker 3: Until now. 76 00:04:24,360 --> 00:04:26,719 Speaker 2: This is a sea change. For the first time ever, 77 00:04:27,120 --> 00:04:30,040 Speaker 2: a Muslim investor would be able to buy a property 78 00:04:30,120 --> 00:04:34,080 Speaker 2: in Mecca outright. In Saudi Arabia and other cities, they 79 00:04:34,080 --> 00:04:38,320 Speaker 2: have been loosening the ownership criteria little by little. They 80 00:04:38,400 --> 00:04:42,400 Speaker 2: want to streamline the process and enable foreigners, especially the 81 00:04:42,440 --> 00:04:45,039 Speaker 2: many millions of expats who live in Saudi Arabia, to 82 00:04:45,040 --> 00:04:46,280 Speaker 2: be able to buy a property. 83 00:04:47,279 --> 00:04:50,680 Speaker 3: Those aren't the only changes. Saudi Arabia used to limit 84 00:04:50,720 --> 00:04:53,880 Speaker 3: the issuance of visas for people doing a shorter pilgrimage 85 00:04:54,120 --> 00:04:57,279 Speaker 3: called Umra around the time of the Hajh, but the 86 00:04:57,360 --> 00:05:01,240 Speaker 3: Kingdom recently expanded the time frame for those pilgrimages and 87 00:05:01,279 --> 00:05:04,960 Speaker 3: loosen some of its visa restrictions, meaning approved visitors can 88 00:05:05,000 --> 00:05:08,440 Speaker 3: now go for shorter pilgrimages virtually year round. 89 00:05:09,080 --> 00:05:12,240 Speaker 2: Some say that because of the focus on the pilgrims 90 00:05:12,240 --> 00:05:14,760 Speaker 2: that the city kind of lacked a lot of the 91 00:05:14,800 --> 00:05:18,840 Speaker 2: infrastructure that it needed in terms of, you know, better transport, 92 00:05:18,960 --> 00:05:23,880 Speaker 2: better metro, more hospitals, more schools, And there is a 93 00:05:23,920 --> 00:05:26,520 Speaker 2: push in the government and among a lot of those 94 00:05:26,520 --> 00:05:29,680 Speaker 2: developers to build up more of the infrastructure to cater 95 00:05:29,800 --> 00:05:30,839 Speaker 2: to the people who live. 96 00:05:30,720 --> 00:05:32,359 Speaker 3: There, not just the tourists. 97 00:05:32,880 --> 00:05:36,440 Speaker 2: Yeah, exactly. But now what we're seeing is that the 98 00:05:36,480 --> 00:05:39,200 Speaker 2: government is decided to come in and take some of 99 00:05:39,240 --> 00:05:42,760 Speaker 2: the neighborhoods and the areas that they basically said were 100 00:05:43,160 --> 00:05:47,080 Speaker 2: unplanned districts, and they bought a lot of those homes 101 00:05:47,520 --> 00:05:51,760 Speaker 2: and they demolished those areas and started building from scratch. 102 00:05:52,240 --> 00:05:57,119 Speaker 2: But the expansion of this city is not unlimited. Land 103 00:05:57,200 --> 00:06:02,039 Speaker 2: is very very scarce, especially around the Grand Masque Mecca. 104 00:06:02,160 --> 00:06:05,679 Speaker 3: A small town surrounded by mountains is running out of land. 105 00:06:06,520 --> 00:06:09,600 Speaker 3: That makes every square meter extra valuable. 106 00:06:10,040 --> 00:06:12,520 Speaker 2: Everyone who had a plot of land in Mecca was 107 00:06:12,560 --> 00:06:14,520 Speaker 2: able to make a lot of money because you could 108 00:06:14,760 --> 00:06:18,800 Speaker 2: build up a hotel and basically you get a lot 109 00:06:18,839 --> 00:06:23,120 Speaker 2: of captive demand, religious tourists who are coming in, pilgrims 110 00:06:23,120 --> 00:06:25,640 Speaker 2: who are coming in, and you're able to make money. 111 00:06:26,000 --> 00:06:29,000 Speaker 3: Brokers say land near the Grand Mosque has recently traded 112 00:06:29,080 --> 00:06:32,720 Speaker 3: near eighty seven thousand dollars per square meter, among the 113 00:06:32,800 --> 00:06:37,520 Speaker 3: highest prices globally. Meanwhile, five star hotel rooms can cost 114 00:06:37,560 --> 00:06:40,320 Speaker 3: about ten thousand dollars a night. During the holy month 115 00:06:40,440 --> 00:06:41,480 Speaker 3: of Ramadan. 116 00:06:41,400 --> 00:06:44,560 Speaker 2: I was speaking to one broker who has brokerish for 117 00:06:44,760 --> 00:06:48,560 Speaker 2: very high end properties and he was telling me in Mecca, 118 00:06:48,680 --> 00:06:53,920 Speaker 2: we're selling at Monte Carlo prices. It's that crazy the demand. 119 00:06:54,400 --> 00:06:57,479 Speaker 3: Zanam says prices in Mecca have been high for a 120 00:06:57,560 --> 00:07:01,560 Speaker 3: long time, but opening up Mecca to foreign investment could 121 00:07:01,640 --> 00:07:02,919 Speaker 3: push them even higher. 122 00:07:03,360 --> 00:07:06,200 Speaker 2: The government of Saudi Arabia have been allowing a lot 123 00:07:06,200 --> 00:07:10,680 Speaker 2: of construction of hotel rooms because they want to ensure 124 00:07:10,800 --> 00:07:13,000 Speaker 2: that you don't end up with a situation where it 125 00:07:13,080 --> 00:07:16,520 Speaker 2: becomes so expensive. A lot of the pilgrims who come, 126 00:07:16,640 --> 00:07:20,320 Speaker 2: many of them come from very poor nations like Bangladesh, 127 00:07:20,440 --> 00:07:23,960 Speaker 2: or you know parts of India or Pakistan or Afghanistan, 128 00:07:24,120 --> 00:07:27,000 Speaker 2: or you know countries where the income is very very 129 00:07:27,080 --> 00:07:30,480 Speaker 2: low and many of them would not afford to be 130 00:07:30,560 --> 00:07:34,680 Speaker 2: staying in expensive hotels. On the other hand, the prices 131 00:07:34,720 --> 00:07:39,360 Speaker 2: for the actual homes to buy a property has been 132 00:07:39,440 --> 00:07:42,360 Speaker 2: kind of controlled by dynamics within the local market because 133 00:07:42,560 --> 00:07:45,160 Speaker 2: the market hasn't been been to foreign investors. But now 134 00:07:45,240 --> 00:07:49,600 Speaker 2: the expectations that once foreigners will be able to buy, 135 00:07:49,720 --> 00:07:53,000 Speaker 2: you can probably see prices search. One developer told me 136 00:07:53,520 --> 00:07:56,960 Speaker 2: that the first tower they started building, they started selling 137 00:07:57,000 --> 00:08:01,280 Speaker 2: off plan, which means before construction they saw around thirty 138 00:08:01,320 --> 00:08:04,560 Speaker 2: five thousand real per square meter, and he told me 139 00:08:04,600 --> 00:08:06,800 Speaker 2: once the market is open, we expect to be selling 140 00:08:06,800 --> 00:08:09,640 Speaker 2: at around fifty thousand real per square meter. 141 00:08:10,080 --> 00:08:14,000 Speaker 3: Are there concerns about this Holy Journey becoming more and 142 00:08:14,040 --> 00:08:17,840 Speaker 3: more unaffordable for people and less accessible for people across 143 00:08:17,840 --> 00:08:21,280 Speaker 3: the Muslim world if these changes continue. Is the government 144 00:08:21,800 --> 00:08:22,560 Speaker 3: concerned about that? 145 00:08:23,000 --> 00:08:25,880 Speaker 2: There are a lot of critiques, of course, Some basically 146 00:08:25,960 --> 00:08:30,120 Speaker 2: say the focus on building higher towers and more sky 147 00:08:30,200 --> 00:08:33,520 Speaker 2: scrapers is changing the city. Some say it kind of 148 00:08:33,559 --> 00:08:37,800 Speaker 2: stands in tension with the whole egilitarian mission of going 149 00:08:37,880 --> 00:08:41,600 Speaker 2: to a holy site wearing white clothing to kind of 150 00:08:42,120 --> 00:08:45,040 Speaker 2: not show who's poor and who's rich. Building five star 151 00:08:45,080 --> 00:08:47,160 Speaker 2: hotels would stand in some tension. 152 00:08:46,880 --> 00:08:50,280 Speaker 3: With that, and the Hajj is already an expensive endeavor. 153 00:08:50,720 --> 00:08:53,800 Speaker 3: In twenty twenty five, Hajj packages from the US cost 154 00:08:53,920 --> 00:08:57,640 Speaker 3: ten to twenty thousand a person, according to Saudi Arabia's 155 00:08:57,679 --> 00:08:59,640 Speaker 3: centralized pilgrimage booking platform. 156 00:09:00,280 --> 00:09:02,800 Speaker 2: The government would say, we need to increase the supply 157 00:09:02,920 --> 00:09:06,560 Speaker 2: to keep this place affordable, to enable the increasing number 158 00:09:06,559 --> 00:09:10,360 Speaker 2: of pilgrims to find space to stay at affordable levels. 159 00:09:10,640 --> 00:09:13,760 Speaker 2: At the same time, some people say some have criticized 160 00:09:13,760 --> 00:09:17,400 Speaker 2: the over development and they say that this is changing 161 00:09:17,480 --> 00:09:20,520 Speaker 2: the very landscape of the holy city of Mecca. 162 00:09:21,040 --> 00:09:24,360 Speaker 3: Representatives for the Saudi government didn't respond to requests for 163 00:09:24,440 --> 00:09:28,960 Speaker 3: comment about development in Mecca. Another challenge is how to 164 00:09:29,040 --> 00:09:33,160 Speaker 3: keep residents and tourists safe. Mecca has a history with 165 00:09:33,240 --> 00:09:39,240 Speaker 3: fatalities from extreme heat, stampedes, and construction accidents, So with 166 00:09:39,320 --> 00:09:42,600 Speaker 3: more visitors, how is the government preparing. 167 00:09:42,760 --> 00:09:45,640 Speaker 2: This is the million dollar question, right how do you 168 00:09:45,800 --> 00:09:49,120 Speaker 2: actually keep millions of people who descend on a city 169 00:09:49,200 --> 00:09:51,720 Speaker 2: at the same time safe and ensure there are no 170 00:09:51,800 --> 00:09:55,520 Speaker 2: fatal accidents, and they've been trying so many different things. 171 00:09:55,600 --> 00:09:58,800 Speaker 2: So on one hand, they've been trying limiting the number 172 00:09:58,800 --> 00:10:01,480 Speaker 2: of people who are able to to come during the hashtime, 173 00:10:01,520 --> 00:10:05,160 Speaker 2: which is the two week period, and now each country 174 00:10:05,280 --> 00:10:08,360 Speaker 2: is assigned a certain quota, and they've been trying to 175 00:10:08,480 --> 00:10:12,400 Speaker 2: kind of give priority to people who are older, and 176 00:10:12,480 --> 00:10:15,199 Speaker 2: they don't allow children to be into the city during 177 00:10:15,200 --> 00:10:17,679 Speaker 2: that time to come to the Haj. So they've been 178 00:10:17,720 --> 00:10:20,760 Speaker 2: trying to control the numbers. 179 00:10:21,520 --> 00:10:25,560 Speaker 3: Coming up, why Saudi Arabia needs to court international investors 180 00:10:26,000 --> 00:10:28,520 Speaker 3: and what other areas of the country it's opening up 181 00:10:40,080 --> 00:10:43,800 Speaker 3: for a long time Bloomberg zenab Fata says one industry 182 00:10:44,000 --> 00:10:46,120 Speaker 3: dominated Saudi Arabia's economy. 183 00:10:46,360 --> 00:10:49,920 Speaker 2: Saudi Arabia have been reliant as an economy on oil 184 00:10:50,000 --> 00:10:53,480 Speaker 2: for a very long time, and the oil sustained pretty 185 00:10:53,559 --> 00:10:59,920 Speaker 2: much the government's budget, the infrastructure spent everything in the country. 186 00:11:00,440 --> 00:11:05,119 Speaker 3: Crown Prince Mohammed Benzelman launched Vision twenty thirty, a blueprint 187 00:11:05,240 --> 00:11:08,079 Speaker 3: for how to shift the country's economy away from its 188 00:11:08,120 --> 00:11:13,000 Speaker 3: dependence on oil. The plan brought about significant change. It 189 00:11:13,000 --> 00:11:16,920 Speaker 3: aimed to increase women's participation in the labor market, expanded 190 00:11:16,920 --> 00:11:21,480 Speaker 3: the tourism sector and invited outside partners, including Formula one 191 00:11:21,600 --> 00:11:24,880 Speaker 3: and FIFA to host events there. But a decade later, 192 00:11:25,240 --> 00:11:28,840 Speaker 3: some of Vision twenty thirty's biggest swings haven't worked out, 193 00:11:29,520 --> 00:11:31,760 Speaker 3: like the one and a half trillion dollar plan for 194 00:11:31,840 --> 00:11:35,320 Speaker 3: a futuristic city called Neom, which has been scaled back. 195 00:11:35,800 --> 00:11:39,200 Speaker 3: The country is still heavily reliant on oil, which makes 196 00:11:39,280 --> 00:11:42,920 Speaker 3: up roughly sixty percent of government revenue, and the price 197 00:11:42,920 --> 00:11:46,160 Speaker 3: of oil has been falling. Brent crude is now less 198 00:11:46,160 --> 00:11:50,680 Speaker 3: than seventy dollars a barrel. Bloomberg Economics estimates Saudi Arabia 199 00:11:50,720 --> 00:11:53,640 Speaker 3: needs a price of almost one hundred dollars to balance 200 00:11:53,679 --> 00:11:57,840 Speaker 3: its budget. All this means the kingdom is running a 201 00:11:57,880 --> 00:12:01,880 Speaker 3: budget deficit, and now Zenas says it's pivoting away from 202 00:12:02,040 --> 00:12:05,800 Speaker 3: flashy investments in favor of more pragmatic ones. 203 00:12:06,480 --> 00:12:09,400 Speaker 2: They know that the world is moving into a different direction, 204 00:12:09,720 --> 00:12:12,160 Speaker 2: that clean energy is going to get a bigger share 205 00:12:12,280 --> 00:12:15,720 Speaker 2: of the economy going forward, and they need to find 206 00:12:15,880 --> 00:12:18,360 Speaker 2: other ways. They need to move the economy away from 207 00:12:18,400 --> 00:12:22,240 Speaker 2: this reliance on oil by building up other sectors. Now, 208 00:12:22,280 --> 00:12:25,760 Speaker 2: religious tourism brings in a lot of money into Saudi Arabia, 209 00:12:25,880 --> 00:12:29,760 Speaker 2: and although we don't have a lot of exact estimates, 210 00:12:29,760 --> 00:12:33,400 Speaker 2: some analysts they say so over twelve billion dollars annually. 211 00:12:33,440 --> 00:12:35,800 Speaker 2: That comes from all the people who are coming on 212 00:12:35,840 --> 00:12:40,319 Speaker 2: the different airlines, staying in hotels, the food, the transportation. 213 00:12:40,840 --> 00:12:45,280 Speaker 2: So when you look at growing religious tourism, that by 214 00:12:45,400 --> 00:12:49,400 Speaker 2: definition helps also reduce the reliance on oil. 215 00:12:50,800 --> 00:12:55,959 Speaker 3: Saudi Arabia is also looking to boost other industries like manufacturing, logistics, 216 00:12:56,000 --> 00:12:59,880 Speaker 3: and technology. Just this month, the country amended the rules 217 00:12:59,880 --> 00:13:03,640 Speaker 3: for the Saudi Stock Exchange and capital markets, opening them 218 00:13:03,679 --> 00:13:05,440 Speaker 3: to all foreign investors. 219 00:13:05,840 --> 00:13:09,120 Speaker 2: Recently, when they opened the stock market, we've seen a 220 00:13:09,160 --> 00:13:13,080 Speaker 2: lot of investors very interested in it. We've seen a 221 00:13:13,160 --> 00:13:16,199 Speaker 2: lot of investors go buy into the stocks of the 222 00:13:16,280 --> 00:13:22,040 Speaker 2: developers in anticipation of these rules, basically making these developers 223 00:13:22,600 --> 00:13:25,120 Speaker 2: businesses a lot more thriving, bring in a lot of 224 00:13:25,160 --> 00:13:29,320 Speaker 2: sales and revenue to them. We know that Amilkura has 225 00:13:29,559 --> 00:13:35,920 Speaker 2: basically almost doubled overnight the number of foreign investors from 226 00:13:36,120 --> 00:13:39,800 Speaker 2: State Street to you know, HSBC and Schwabs and funds 227 00:13:39,800 --> 00:13:44,439 Speaker 2: from pretty much every large bank and asset manager who 228 00:13:44,520 --> 00:13:47,480 Speaker 2: are buying into the stocks of this company. A Bulkura 229 00:13:47,800 --> 00:13:50,560 Speaker 2: as well as other companies that build in Maca and 230 00:13:50,640 --> 00:13:54,720 Speaker 2: Medina because they see this as like the surest place 231 00:13:54,840 --> 00:13:57,800 Speaker 2: where demand is there. So there is a lot of 232 00:13:57,840 --> 00:14:01,560 Speaker 2: investments that's happening that's come in from across the Gulf, 233 00:14:01,679 --> 00:14:06,440 Speaker 2: from other countries like Turkey and even further afield. One 234 00:14:06,480 --> 00:14:09,400 Speaker 2: developer told me that he's been contacted by funds in 235 00:14:09,440 --> 00:14:11,680 Speaker 2: Europe and the US and that surprised him. 236 00:14:12,240 --> 00:14:16,439 Speaker 3: Foreign governments have also been eager to invest, largely majority 237 00:14:16,520 --> 00:14:19,960 Speaker 3: Muslim nations interested in securing a piece of Mecca for 238 00:14:20,040 --> 00:14:20,760 Speaker 3: their citizens. 239 00:14:21,120 --> 00:14:25,120 Speaker 2: We're talking about large sovereign wealth funds. We spoke to 240 00:14:25,160 --> 00:14:28,480 Speaker 2: the CIO of the Sovereign Wealth Fund of Indonesia who 241 00:14:28,520 --> 00:14:32,560 Speaker 2: told us that they have allocated one billion dollar to 242 00:14:32,640 --> 00:14:33,360 Speaker 2: buy property. 243 00:14:33,640 --> 00:14:37,080 Speaker 1: Saudi and answer are very close politically as well as 244 00:14:37,160 --> 00:14:39,880 Speaker 1: very important because that's where all of Indonesiaans go for 245 00:14:39,960 --> 00:14:42,000 Speaker 1: Hajj is one of the Indonesian's dream to go to 246 00:14:42,080 --> 00:14:45,480 Speaker 1: haj we're also the largest number of population percentage wise 247 00:14:45,800 --> 00:14:48,680 Speaker 1: that go to Mecca. So when they opened it in Saudi, 248 00:14:49,080 --> 00:14:50,960 Speaker 1: we took that opportunity right away. 249 00:14:51,280 --> 00:14:54,520 Speaker 2: Those funds are doing that because they want to be 250 00:14:54,640 --> 00:14:59,960 Speaker 2: able to build in Mecca to make the pilgrimage cheaper 251 00:15:00,160 --> 00:15:04,160 Speaker 2: for a lot of the Muslim pilgrims from Indonesia. The 252 00:15:04,200 --> 00:15:08,720 Speaker 2: same with the Malaysian Funds and other investors from Muslim 253 00:15:08,720 --> 00:15:13,440 Speaker 2: majority nations. You have presidents in like Indonesia who are 254 00:15:13,560 --> 00:15:16,520 Speaker 2: running on this. Basically, this is one of their campaign 255 00:15:16,760 --> 00:15:20,280 Speaker 2: promises to their constituents. We will enable you to go 256 00:15:20,320 --> 00:15:23,120 Speaker 2: and do the haj and they do that through basically 257 00:15:23,160 --> 00:15:27,720 Speaker 2: these investments by their sovereign wealth funds into Mecca, by 258 00:15:27,800 --> 00:15:31,880 Speaker 2: building up a hajh village, buying up hotels to ensure 259 00:15:31,920 --> 00:15:36,160 Speaker 2: that the cost for their own pilgrims are lower and 260 00:15:36,240 --> 00:15:37,000 Speaker 2: are controlled. 261 00:15:39,680 --> 00:15:42,960 Speaker 3: For Saudi Arabia, the challenge now is getting all those 262 00:15:43,040 --> 00:15:46,680 Speaker 3: foreign investors and tourists who are drawn to the country 263 00:15:46,720 --> 00:15:50,400 Speaker 3: for its holy sites to consider other parts of the country. 264 00:15:50,800 --> 00:15:54,000 Speaker 2: Mecca and Medinaz, one economist told me, is really the 265 00:15:54,400 --> 00:15:57,800 Speaker 2: low hanging fruit for the investment case to Saudi Arabia. 266 00:15:57,840 --> 00:15:59,880 Speaker 2: It's where the government doesn't have to do a lot 267 00:15:59,880 --> 00:16:02,920 Speaker 2: of work. There is already a lot of demand. One 268 00:16:02,960 --> 00:16:05,560 Speaker 2: thing that's trying to kind of grow in a big 269 00:16:05,600 --> 00:16:09,720 Speaker 2: way is now the tourism that's adjacent to their religious tourism. 270 00:16:09,840 --> 00:16:12,960 Speaker 2: So they say, you're a pilgrim. You're coming from China 271 00:16:13,440 --> 00:16:15,920 Speaker 2: and you're coming here for two weeks. You went to Macca, 272 00:16:15,960 --> 00:16:18,320 Speaker 2: you went to Medina. You will be able now to 273 00:16:18,520 --> 00:16:21,000 Speaker 2: also go maybe to the south of the country or 274 00:16:21,080 --> 00:16:24,600 Speaker 2: explore the Etsy. So they're building huge developments there, and 275 00:16:24,680 --> 00:16:29,359 Speaker 2: they're building on islands that rivaled the Maldives. They're untouched 276 00:16:29,400 --> 00:16:32,120 Speaker 2: for decades, they were never touched. 277 00:16:31,840 --> 00:16:35,920 Speaker 3: So that the pitches come for harsh. Stay an extra week, 278 00:16:36,160 --> 00:16:38,120 Speaker 3: see the rest of what the country has to offer. 279 00:16:38,400 --> 00:16:40,520 Speaker 2: Go to the Red Sea and have a vacation there, 280 00:16:41,280 --> 00:16:42,160 Speaker 2: go scuba diving. 281 00:16:48,880 --> 00:16:51,800 Speaker 3: This is the Big Take from Bloomberg News. I'm Sarah Holder. 282 00:16:52,200 --> 00:16:54,800 Speaker 3: To get more from The Big Take and unlimited access 283 00:16:54,840 --> 00:16:58,720 Speaker 3: to all of bloomberg dot com, subscribe today at Bloomberg 284 00:16:58,760 --> 00:17:02,240 Speaker 3: dot com slash Cast offer. If you liked this episode, 285 00:17:02,400 --> 00:17:05,040 Speaker 3: make sure to subscribe and review The Big Take wherever 286 00:17:05,080 --> 00:17:07,960 Speaker 3: you listen to podcasts. It helps people find the show. 287 00:17:08,440 --> 00:17:10,440 Speaker 3: Thanks for listening. We'll be back tomorrow.