Saudi Railway Company (SAR) has signed an agreement with local investment firm Riyad Capital to establish a real estate fund to develop a mixed-use, transit-oriented project in Mecca.

The project will span more than 90,000 square metres in the Al-Rusifah district, near the Haramain high-speed railway station in Mecca.

The development is estimated to cost more than SR6bn ($1.6bn).

Riyad Capital operates through four business lines: asset and wealth management, brokerage, corporate investment banking and securities services.

In an official statement, the company said its real-estate portfolio spans three continents and is valued at more than $6bn.

UK-based analytics firm GlobalData expects Saudi Arabia's construction industry to grow by 4% in real terms in 2025, supported by investments in the housing, energy and transport infrastructure sectors.

The commercial sector is estimated to grow by 3.7% in real terms in 2025 and to register an average annual growth of 3.7% from 2026 to 2029, supported by the government’s Vision 2030 plan. Under that plan, the government aims to attract 150 million tourists annually and add 320,000 hotel rooms by 2030.