Saudis Set to Build Kingdom Tower, Soon to be The World's Tallest Building

Saudi Arabia knows how to keep up with the Joneses. The Burj Khalifa in Dubai has officially been the world’s tallest building since its opening early last year, but by 2016-ish Saudi Arabia plans to let the UAE know exactly who the big brother is on the Arabian Peninsula. The Saudis have inked a deal between the Kingdom’s holdings company and a certain Bin Laden Group to build the world’s tallest building, an elegant yet extreme tower that will rise 3,281 feet above the streets of Jeddah.

For reference, the Burj peaks at just above 2,700 feet. The tallest tower in the U.S., the Willis Tower in Chicago (formerly the Sears Tower), will be less than half as tall as the Saudis’ appropriately-named Kingdom Tower. Designed by Chicago-based Adrian Smith + Gordon Gill (Smith also designed the Burj), its three-petal shape is inspired by that of local desert flora, a visual metaphor for growth in the desert.

That’s romantic and all, but we’re far more blown away by the jaw-dropping 5.38 million square feet of interior space and the main draw: an observation deck on the 157th floor. Total cost: $1.23 billion. Just another drop in the bucket for the oil-rich Saudi government/family, which will plunge a total of $20 billion into the development in Jeddah where the Kingdom Tower will take center stage.

With new contracts come new images; click through above to see what the Burj-beating Kingdom Tower will look like.

Saudis Plan World's Tallest Tower

RIYADH—Saudi Arabia's Prince Alwaleed bin Talal announced plans to build the world's tallest building in Jeddah less than two years after the Burj Khalifa opened in Dubai at a height that many thought wouldn't be surpassed for years.

The planned tower will soar to 3,281 feet (1,000 meters) and will include a hotel, luxury condominiums and offices. It would dwarf the Burj Khalifa, which is 2,717 feet (828 meters), and would also be the world's tallest man-made structure.

Prince Alwaleed at a news conference Tuesday said his company, Kingdom Holding Co., had signed a 4.6 billion Saudi riyal ($1.23 billion) deal with Bin Laden Group to build the tower, which is expected to take more than five years to complete. Bin Laden Group is the largest construction firm in Saudi Arabia and is owned by the bin Laden family, which in the 1990s distanced itself from Osama bin Laden.

Prince Alwaleed, one of the Middle East's wealthiest businessmen, said finances for the tower are in place and construction is expected to start soon, without giving further details. Its designer was a team led by Chicago-based Adrian Smith + Gordon Gill Architecture.

"Building this tower in Jeddah sends a financial and economic message that should not be ignored," Prince Alwaleed said. "It has a political depth to it to tell the world that we Saudis invest in our country."

Countries for years have vied for bragging rights to the world's tallest building. The U.S. held the title for decades with different buildings in New York and Chicago until 1998, when it shifted to Asia with the opening of the Petronas Towers in Kuala Lumpur.

But the world's tallest buildings also have had reputations for poor financial performance. For years, the Empire State Building in New York was known as the "Empty State Building" because of its slow leasing progress. The Burj Khalifa, a mixed-use property, also opened during a global economic downturn. As the supply of office space has swelled, Dubai's vacancy rate has risen to 44%, according to Jones Lang LaSalle.

"The world's tallest building has never been about making the maximum financial return," says Antony Wood, executive director of the Council on Tall Buildings and Urban Habitat. "It's about ego. It's about attention. It's about making a statement."

Saudi Arabia's Kingdom Holding, run by billionaire Prince Alwaleed bin Talal, has signed a $1.23 billion deal with Bin Laden Group to build the world's tallest tower in Jeddah, which will soar 3,281 feet. Summer Said has details from Saudi Arabia.

The Saudi project is designed to be the showpiece of Kingdom City, a 57-million-square-foot megadevelopment north of Jeddah. Overlooking the Red Sea, it is slated to cost $20 billion.

"This project will provide sustainable profits to Kingdom Holding shareholders," Prince Alwaleed said. It "has been in discussion since four years because of our emphasis to have it very economically viable."

Prince Alwaleed, who owns 95% of Kingdom Holding, has focused his investments on banks, hotels and media companies, building sizable stakes in firms such as CitigroupInc., News Corp., Apple Inc. and Time Warner Inc. News Corp. owns Dow Jones & Co., publisher of The Wall Street Journal.

The prince kept a low profile in the aftermath of the global financial crisis. But more recently, he started seeking investors and acquisitions around the world.

Kingdom Holding said it had signed a shareholder agreement under which Bin Laden Group would take a 16.63% stake in Kingdom's Jeddah Economic Co. unit, which will build the tower. Kingdom will own 33.35% in Jeddah Economic, while 33.35% will be held by Abrar International Holding Co. and 16.67% by investor Abdurrahman Sharbatly.

Construction costs are a lot lower in the Mideast than in the U.S. For example, the tallest building being developed in the U.S., One World Trade Center in New York, is slated to cost $3.1 billion. It will be 1,776 feet tall.