The investment firm headed by Saudi billionaire Prince Alwaleed bin Talal said Tuesday it signed a 4.6 billion riyal (US$1.2 billion) deal with the Saudi Binladen Group to build the world's tallest tower.
Kingdom Holding Co. said the more than 3,280 foot (1,000 metres) high Kingdom Tower, to be built north of the Red Sea city of Jeddah, is part of the first phase of the planned Kingdom City. The sprawling mega project, announced in 2008, is slated to cover a two-square mile area.
Kingdom Tower will include a hotel, serviced apartments, luxury condominiums and offices occupying roughly 5.4 million square feet, KHC said.
The project is but one of several ambitious mega-ventures in the kingdom, OPEC's top exporter, as it seeks to diversify its economic base from the crude oil that has fuelled its growth for years.
It also reflects a continuation of the unstated race between the oil rich Gulf nations that are also pumping tens of billions of dollars into job creation and housing for their lower income residents.
In June 2009, KHC signed a deal with Dubai-based Emaar Properties to develop and oversee the construction of Kingdom City and Kingdom Tower.
Emaar, which is partly owned by Dubai's government, is the developer of the Burj Khalifa, currently the tallest building in the world.
Alwaleed's proposed skyscraper would shatter the record for Burj Khalifa, which opened in January 2010. That tower has 160 livable floors and rises 2,717 feet (828 metres), making it not only the tallest building but also the tallest freestanding structure in the world.
By comparison, the tallest building in the United States, the Willis Tower in Chicago, stands at 1,451 feet (442 metres), although counting its antenna towers it rises to 1,729 feet (527 metres).
The One World Trade Center tower being built in New York will measure 1,776 feet (541 metres) with its antenna spire. It's due for completion in 2013.
Dubai developer Nakheel had itself planned to build a tower more than 0.6 mile (1 kilometre) high in the city-state, but it shelved those plans in early 2009 as the global economic crisis soured demand for real estate in the emirate.
The Kingdom Tower deal was signed between Jeddah Economic Co., a KHC affiliate, and the Binladen Group, a construction giant. Binladen will hold 16.6 per cent stake in JEC.