BPKH outlines Saudi hotel fund with 8% target return
The proposed Haramain Hospitality Fund would target 250 million Saudi riyals and run for 10 years, with returns not guaranteed.
Indonesia’s Hajj Financial Management Agency (BPKH) has presented a sharia-compliant investment initiative to lease hotel capacity in Makkah and Madinah. The Haramain Hospitality Fund has a target size of 250 million Saudi riyals, or about US$67 million, and aims to deliver returns of around 8% over a 10-year term.
BPKH executive head Fadlul Imansyah outlined the initiative on 15 October 2026 at the International Hajj Fund Forum, held jointly with Bank Indonesia as part of the Indonesia Sharia Economic Festival 2026. He stressed that the 8% return was a target rather than a guarantee.
Under the proposed arrangement, the fund would lease hotels from their owners and sublet them to BPKH Limited, the agency’s Saudi subsidiary. Fadlul said this would let the subsidiary concentrate on hotel operations for hajj and umrah pilgrims without committing substantial rental capital upfront.
He described a closed-end fund managed by a Saudi asset management company and regulated by Saudi Arabia’s Capital Market Authority. Its planned safeguards include fixed rental contracts, independent board oversight, property inspections and contingency reserves.
Fadlul said the initiative was also intended to support cooperation among Indonesian institutions, Saudi investors, local asset managers and hospitality investors. BPKH managed about Rp185 trillion as of September 2026, with average annual returns of 6.7%, according to the figures he presented.
