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Saudi Prince Alwaleed bin Talal speaks next to a model of the world's tallest tower, to be built in Jeddah.
RIYADH—Saudi Arabia's Kingdom Holding Co., run by billionaire Prince Alwaleed bin Talal, said Tuesday its associate firm Jeddah Economic Co. had signed a 4.6 billion Saudi riyal ($1.23 billion) deal with the Bin Laden Group to build the world's tallest tower in Jeddah.
The planned tower, which will soar to more than 1,000 meters, will include a hotel, serviced apartments, luxury condominiums and offices, and will occupy an area of 500,000 square meters, Kingdom Holding said in a statement posted on the Saudi bourse website.
"This project will provide sustainable profits to Kingdom Holding shareholders," Prince Alwaleed said at a press conference in Riyadh. "[It] has been in discussion since four years because of our emphasis to have it very economically viable ... this project is very feasible for the shareholders and everybody is satisfied with the potential returns."
Construction on the project, which will take 63 months to complete, is expected to start soon, Prince Alwaleed said. He added that finances for the tower are already in place, without providing any further details.
The tower would top Dubai's 828-meter Burj Khalifa, which at present is the world's tallest building. Kingdom's project will be located in Jeddah's Kingdom City, which occupies an area of 5.3 million square meters, and overlooks the Red Sea and Obhur Creek.
"It's ambitious and in planning phase for a while. The critics will say it's unnecessary when resources may be deployed for other much needed development and infrastructure," said Saud Masud, financial analyst at regional investment bank Rasmala.
"However, as a symbolic undertaking this project may carry merit. Saudi is the largest economy in the Middle East with a need for socioeconomic advancement and development. The tower may reflect inspiration to that effect."
Kingdom Holding said it had signed a shareholder agreement under which Bin Laden Group would take a 16.63% stake in Jeddah Economic Co., which will build the tower. Kingdom will own a 33.35% in Jeddah Economic Co., while 33.35% will be held by Abrar International Holding Co. and 16.67% by investor Abdurrahman Sharbatly.
The planned tower will be part of the more than 5.3-million-square-meter Kingdom City, north of Jeddah, which is expected to cost $20 billion.
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