Saudi Arabia has initiated significant steps toward regulating real estate ownership by listed firms and investment funds, marking a historic move in the Kingdom’s capital markets landscape. The announcement involves public consultation on draft rules aimed at managing property ownership, particularly in the sacred cities of Makkah and Madinah. This consultation is crucial for shaping regulations that could enhance investor confidence and integrate foreign capital into the Saudi real estate market.
Saudi Arabia’s capital markets regulator has opened a public consultation on proposed rules governing real estate ownership by listed companies, investment funds, and special purpose entities, including properties located in the holy cities of Makkah and Madinah.
The Capital Market Authority invited relevant and interested participants in the capital market to submit feedback on the draft controls.
The consultation will run for 15 calendar days, ending on January 14, 2026.
Saudi Real Estate Consultation
The draft aims to regulate the mechanism for real estate ownership by listed companies established under the Companies Law, as well as licensed investment funds and special purpose entities (SPEs). It also covers the acquisition of other in-kind rights over real estate within the Kingdom, including in Makkah and Madinah.
According to the CMA, the proposed framework seeks to enhance capital market efficiency, increase investor attractiveness, and strengthen Saudi Arabia’s regional and international competitiveness. The proposed controls clarify which listed companies, investment funds, and SPEs are subject to the provisions, along with the rules governing the ownership of shares in these entities by non-Saudi investors, whether individuals or corporate entities. These rules carry specific conditions and defined ownership limits.
They also regulate ownership of units in investment funds that invest part or all of their assets in real estate located within the Kingdom, including in Makkah and Madinah.
Real Estate in the Holy Cities
The draft also governs ownership of real estate in the two holy cities by listed companies for non-operational purposes. This is contingent on previously established conditions, including that the foreign strategic investor must not, at any time, hold shares in the listed company or any convertible debt instruments.
The CMA clarified that the proposed controls do not infringe upon existing regulatory obligations of foreign investors, listed companies, investment funds, SPEs, or capital market institutions under current laws and regulations. This encompasses the Law of Real Estate Ownership and Investment by Non-Saudis, applicable regardless of whether entities are operational or in the process of liquidation.
The Authority stated that this approach maintains regulatory consistency and enhances clarity across frameworks governing real estate ownership in the Kingdom. The proposed controls build on existing frameworks and do not introduce new provisions. They align with the newly issued Non-Saudi Real Estate Ownership Law, which takes effect at the beginning of 2026 and empowers the CMA under Article 4 to issue regulations for real estate ownership by listed companies, investment funds, and SPEs.
Saudi CMA
Once approved, the draft is expected to stimulate investment, enhance international investor participation, and bolster foreign capital inflows into the Saudi capital market. The CMA emphasized that these measures will also support the local economy and spur growth in the real estate sector, aligning with the objectives of Saudi Vision 2030 for financial sector development.
The CMA will thoroughly consider feedback from individuals, government entities, the private sector, and CMA-supervised entities before granting final approval of the controls. Input can be provided through the Unified Electronic Platform for Consulting the Public and Government Entities, affiliated with the National Competitiveness Centre, or via email to [email protected].