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The Jeddah Economic Company has appointed an EC Harris/Mace joint venture team to project manage the iconic Kingdom Tower project in Jeddah, Saudi Arabia. Courtesy EC Harris / Mace
The Jeddah Economic Company has appointed an EC Harris/Mace joint venture team to project manage the iconic Kingdom Tower project in Jeddah, Saudi Arabia. Courtesy EC Harris / Mace

Saudi shoots for the stars as 1km-tall Kingdom Tower set to rise

After six years of planning, construction is scheduled to start on April 1 as Saudi Arabia intends to place itself at the top of the planet's tallest buildings list knocking the Burj Khalifa off its pedestal.

In the sleepy dusty outskirts of Jeddah, a giant is preparing to finally rise.

In the Saudi Arabian desert 20 kilometres north of the ancient city, the contractors Mace and EC Harris are scheduled to start construction on April 1 of what they say will one day be the world's tallest tower.

The long-heralded plans are ambitious to say the least: not only does the developer Jeddah Economic Company (JEC), headed by Saudi's Prince Al Waleed Bin Talal, plan to build the world's first tower that tops 1km in height but the 500,000 square metre project is also the centrepiece of a plan to build a 5.2 square kilometre entirely new Kingdom City city centre along the Red Sea coast.

Last month, after six years of planning and many false starts, JEC awarded the two builders, based in London, the contract to manage the building of the vast super tower, putting in place the final piece in the jigsaw of getting the project off the ground.

The news came five months after it was announced financing was in place for the project. In August 2011 Kingdom Holding struck a deal with the world's largest construction firm, Saudi BinLaden Group, to build the tower and help finance the scheme.

The project is the latest in a long-fought battle by developers to claim the title of world's tallest building, with Azerbaijan, China and Qatar also hoping to top Dubai's Burj Khalifa's 830 metre record.

But, with costs estimated to reach US$1.2 billion (Dh4.4bn) and plenty of desert around Jeddah in which to build, why does the city need to build another huge tower? Do we really need to keep constructing taller and taller buildings?

"Why does Jeddah need the tallest tower in the world? That's a very good question," says John Harris the co-head of Jones Lang LaSalle's Saudi Arabian practice.

"There's very much a feeling that Riyadh has its own iconic buildings and Jeddah wants to compete. The tourism market is strong and we're starting to see an increase in office rents and there is not a lot of good quality master-planned space.

"So I think the idea of Kingdom City is a good one but whether it needs a kilometre tall tower to go with that is an open question."

EC Harris points out that, in general, construction costs increase by an average of 43 per cent between the 10th and the 50th floors of a building.

"Tall buildings are not surprisingly more expensive to build than low-rise developments," says Paul Cohen, a partner at EC Harris.

"Firstly the building form and technical design complexities of tall towers incur higher costs than other types of development. In addition, labour productivity on towers tends to be lower due to various logistical factors, including the increased time taken to get workers to the workface, especially as the tower gets higher, and the increased health and safety measures needed to keep these workers safe," he says.

"Looking more closely at the design of tall towers, the height, shape and slenderness ratio are important considerations for developers because they make tall towers intrinsically less efficient and therefore more expensive than lower-rise schemes."

The prohibitive costs involved with constructing tall buildings have led a number of the developers of super-tall towers to bankruptcy over the years.

They have also led analysts to half jokingly point to a striking correlation between the completion of world's tallest buildings and economic crashes.

In 1999 the Deutsche Bank researcher Andrew Lawrence created the "Skyscraper Index" pointing out that the completions of the Singer Building and the Metropolitan Life Building in 1908 and 1909, respectively followed the 1907 "Bank Panic" in the United States. The completion of the Chrysler Building was a year after the 1929 Wall Street Crash. And the 110 storey Sears Tower, renamed the Willis Tower, was completed in 1973 , shortly before the 1973-4 stock market crash.

However, property experts point out that higher construction costs can often be offset against higher sales values. Although JEC has not announced what proportion of the tower will be given over to offices, flats and hotel rooms, it has said these will all be included in the design.

The property broker Knight Frank estimates that for apartment sales, the typical rise in price per square foot per storey for flats in tall towers tends to be about 1.5 per cent. And, if you include the sky-high prices paid for premium penthouses at the top of these towers, the average price increase per square foot per floor rises to 2.2 per cent.

"In terms of price, the general rule is the higher the apartment, the greater the price premium," says Grainne Gilmore,the head of UK residential research at Knight Frank.

"This not only reflects the enhanced views, but also the increased exclusivity of living towards the top of a tall tower.

"In many cases developers will also change the floor plates and design of apartments on the highest floors, in some cases creating apartments across a whole floor or duplexes or triplexes, which help underpin this price premium," he says.

But clearly, for any developer or country attempting to build the world's tallest tower, the sums are far more complicated than the sheer balancing of development costs versus sales and rental income. Acting as a business and tourist draw and increasing surrounding land values and the prestige associated with completing such a feat also play their part.

"The time is appropriate to build the Kingdom Tower now because the prices for construction materials are low. From cement to iron, everything is low," Prince Al Waleed says in an interview posted on the Kingdom Tower website.

"Secondly, it is being built in Jeddah because this city is in need of a project of this kind, as it would attract more business here. Nothing of this size happened in Jeddah for over two decades.

"It is not important to be the tallest in the world. But reaching the height of 1,000 meters for a tower is not a small achievement," he adds.

"It is true that Saudi Arabia is a big country but there are only a few major cities: Riyadh; Jeddah; Dammam; and Khobar. It is possible to build horizontally but high-rise buildings are landmarks and attractions for people, companies and institutions."

But in his office in Riyadh, Jones Lang LaSalle's John Harris is unconvinced.

"Tall towers are inefficient. That's why we don't build them in the West any more; they don't make money," he says.

"In the Middle East developers are less fixated with efficiency and more driven by aesthetics."

Whatever the driving force behind the project, building a 1km high tower is without doubt a tall order.

lbarnard@thenational.ae

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