19/05/2026 03:44 AST
Public Investment Fund-backed Taiba Investments Co. has finalized an agreement worth SR2.4 billion ($633.4 million) to develop three hotels in central Madinah.
The deal will see the firm create a special purpose company with Osool Integrated Real Estate Co., and Taiba will contribute SR300 million to the project.
The hotels, owned by Osool Integrated Real Estate Co., will provide 1,500 new rooms and will be operated by local and international hotel brands.
The initiative is being launched amid strong growth in Madinah's hospitality market as Saudi Arabia expands tourism and religious hospitality infrastructure under Vision 2030.
Official data from the Ministry of Tourism showed Madinah recorded the Kingdom's highest hotel occupancy rate during the first quarter of 2026 at around 82 percent, and it also ranked first among Saudi cities in hotel occupancy during 2025.
Feras Al-Banyan, CEO of Osool Integrated Real Estate Co., said: "This agreement represents a strategic step within Osool's drive to maximize the value of real estate assets through the development of sustainable institutional partnerships with specialized national entities, contributing to the development of high-quality projects with long-term economic and operational impact.
"We view this project as an integrated model that reflects our ability to develop strategic assets and transform them into high-quality hospitality destinations that support the Kingdom's urban and tourism development objectives."
Sultan bin Badr Al-Otaibi, CEO of Taiba, said the project reflects the firm's expansion strategy driven by synergy-focused, value-creating institutional partnerships.
He added: "This project extends a robust lineup of partnerships recently announced by Taiba, reinforcing our capacity to spearhead pioneering developments, particularly in the Holy Cities, backed by our deep-rooted heritage in launching and operating premier destinations."
The project will be financed in proportion to each party's ownership stake in the special-purpose company and in line with the project's progress.
Madinah welcomed more than 21 million visitors in 2025, up 16.7 percent year on year, while tourism spending in the city rose 22 percent to SR52 billion, according to official data. Licensed hospitality facilities increased to 610, while the number of hotel rooms exceeded 76,000.
Taiba Investments reported higher revenues in the first quarter of 2026, supported by improved occupancy rates across its hotel and residential segments and increased visitor and Umrah performer numbers in Makkah and Madinah.
The company said operating revenues rose 7.8 percent year on year to SR385.7 million from SR357.8 million in the same quarter of 2025.
Taiba also reported a 7.1 percent increase in revenue compared with the preceding quarter, driven by stronger performance from its properties in Madinah, Makkah and Jeddah, as well as contributions from newly added assets, including Rixos Obhur Jeddah Resort.
Despite higher revenues, the company said net profit for the first quarter declined compared with the same period a year earlier due to operating costs associated with newly added properties in its portfolio.
A non-binding memorandum of understanding was signed between Taiba Investments and Osool Integrated Real Estate Co. - a subsidiary of the General Organization for Social Insurance - in November 2025, according to the company's statement on the Saudi Exchange.
At the time, the companies said the agreement aimed to redevelop three hotels on the northern side of the central area in Madinah.
Arab News
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