Huge turnout for Jabal Omar Development Company's IPO

According to Abdul Rahman Faqeeh, chairman of the founding committee of the new company, each single applicant would get 40 shares while an application for two subscribers would get 79 shares and application for three subscribers would receive 119 and the four subscribers would take 159 shares,

He said that the company has a capital of SR6.7 billion, representing the total 671.4 million shares. It offered 201 million shares or 30 per cent of the total to Saudis at the rate of SR10 per share without charging any commission.

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Faqeeh said that the company stocks are expected to be traded on the Saudi bourse by mid-September.

Jabal Omar is investing SR10 billion over seven years to build 40 towers housing hotels and apartments in the area.

The first day of the 10-day initial public offering drew a huge turnout of Saudi investors flocking to banks to purchase shares.

Participating banks for the IPO predicted that the demand for the shares would exceed 10 times due to the proximity of the project to the Grand Mosque in the Holy City of Makkah. A source at Bank Albilad said the high demand for the shares would make it hard to allocate 50 shares to each applicant.

The Makkah Construction Company (MCC), Jabal Omar's strategic partner, and other investors own the rest of the shares. A subscriber is allowed a minimum of 50 and a maximum of 10 million shares.

Faqeeh said that Jabal Omar Company was established to carry out a massive real estate project close to the Grand Mosque, covering an area of 32,000 square metres. "The buildings in the area will have a total space of one million square metres. It is one of the largest real estate projects in the Arab world," he added.

Jabal Omar project will contribute to the development of the Mosque's side. It includes 40 residential towers to accommodate 160,000 pilgrims, prayer area for nearly 200,000 worshippers, and construction of new parking areas and a new road parallel to the Umm Al Qura Road. "The project will change the face of the Holy City of Makkah," he said.

According to Faqeeh, the project would take care of Jabal Omar's topography. Hills in the area are now being flattened to start work on the project. He said the project would utilise domestic and international architectural expertise.

He said that the Jabal Omar project was the brainchild of MCC, which had spent about 17 years to give a complete picture about the project after studying ideas of experts from within and outside the Kingdom.