Builder of tallest tower aims higher still
The builders of the Burj Khalifa are already lining up to secure multibillion-dollar contracts on the planned 1.1km Kingdom Tower in Saudi Arabia, the most likely successor to the title of tallest tower in the world. While the financial downturn has stalled some major projects in the kingdom, the rising price of crude, which hit a two-month high yesterday, and a rapidly growing population is helping to improve sentiment in the country's property market.
Skidmore, Owings and Merrill, the US architecture firm that designed the Burj Khalifa, is hoping to secure the design deal for Kingdom Tower in Jeddah, which will form the centrepiece of Kingdom City, one of the largest and most ambitious projects in the country. The Burj Khalifa, which stretches more than 800 metres skywards, was until its official unveiling yesterday known as the Burj Dubai. If the US firm wins the contract, it will again work closely with Emaar Properties, the developer of the Burj Khalifa, which has taken on a consultancy role for the Kingdom City project.
Skidmore, Owings and Merrill has already designed five of the world's tallest buildings. "We're looking forward to hopefully winning the commission [for Kingdom Tower]," said George Efstathiou, a partner at the firm. The development is being planned by Kingdom Holding, the business conglomerate owned by Prince Alwaleed bin Talal bin Abdulaziz Al Saud. Described by Forbes as the "Buffett of Arabia" after building stakes in global companies he considered to be undervalued, Prince Alwaleed is estimated to have a net worth of about US$13 billion (Dh47.74bn), which puts him in 22nd place in the magazine's global list of billionaires.
He is also the largest individual investor in Citigroup. Mohamed Alabbar, the chairman of Emaar, said work was continuing on the Kingdom City development, which is expected to eventually house 80,000 people. "That's our specialty," Mr Alabbar said. "The landscape has changed in the region. Customers now want real, true, solid companies. They want value as well. They want track record. We're in a region where shortage of housing is an issue."
Arabtec Construction, which built the Burj Khalifa in partnership with South Korea's Samsung Engineering and Construction, and Besix, a joint venture between the UAE's Belhasa and Belgium's Six Construct, have also bid for the main construction package for Kingdom Tower, again in partnership with Samsung. Riad Kamal, the chairman of Arabtec, confirmed that his company had submitted a bid for the project but said it had not yet received a response.
"We submitted figures to them and so did two other companies, but they were expecting offers from two other parties," Mr Kamal said. "That was about two months ago and there has been nothing further since." Multiplex, the Australian construction company, is also vying for the project. "We put in a submission a while back," said Robert Devereux, a project director at Multiplex. "We've been dealing with Emaar, but it's gone a bit quiet at this stage."
It is unclear when the design and construction contracts for the skyscraper will be awarded and work will begin. Kingdom Holding did not respond when contacted yesterday. Kingdom City development, which has been estimated to cost $26.6bn to build, has been mooted for some time but progress has been hampered by the global financial crisis. But strong population and employment in the country continue to fuel demand for property.
There is a shortage of 2 million homes in Saudi Arabia, and the need for another 1.4 million over the next 10 years, according to a report from the property consultancy CB Richard Ellis. The country's population is expected to grow by another 33 million by 2020. Jones Lang LaSalle, another international property consultancy, said Saudi Arabia's property market would be the strongest in the region over the next one to two years.
"The market still needs more real estate, whether that will be tall towers or not is debatable," said Craig Plumb, the head of research for the MENA region at Jones Lang LaSalle. "But given the increase in land value in the last few years, tall towers would be one feasible way of providing the additional real estate." * with additional reporting by Wayne Arnold @Email:email@example.com
Published: January 4, 2010 04:00 AM