Saudi Arabian developer Arabian Dyar and Al Rajhi Capital have launched a 4.5 billion riyals ($1.2 billion) real estate fund to develop properties in Mecca and Madinah. The joint venture represents a major investment in the kingdom's holy cities, where demand for accommodation has surged due to increasing religious tourism.

Arabian Dyar, which is building thousands of properties across Saudi Arabia, will partner with Al Rajhi Capital to target the lucrative market of religious pilgrims. The fund aims to capitalize on Saudi Arabia's Vision 2030 initiative, which seeks to boost religious tourism and diversify the economy beyond oil. Real estate development in these cities faces unique challenges due to strict regulations and the need to accommodate millions of annual visitors.

This partnership between a major developer and financial services firm signals growing confidence in Saudi Arabia's real estate sector. The 4.5 billion riyals fund will focus on creating modern, high-quality properties that can serve both pilgrims and residents, potentially reshaping the accommodation landscape in Islam's two holiest cities.