Saudi Arabia's sky-high ambitions

13 June 2008
The kingdom’s city skylines are set to be transformed as developers start taking advantage of a relaxation in the height-cap on buildings.

The skylines of Saudi Arabia are about to undergo irrevocable change. Until now, there has only been limited highrise development in the kingdom’s main cities. With the exception of the Kingdom Tower and the Al-Faisaliah Tower, both in Riyadh, the country has few tall structures of note. But a combination of the region’s boom in eyecatching real estate developments and an easing of building restrictions in Riyadh and Jeddah mean that new cityscapes are set to appear.

Jeddah’s corniche, for example, will soon have Sama Dubai’s Dubai Towers Jeddah, measuring more than 300 metres in height, as well as the Lamar Towers at 310 metres.

The trend is not restricted to the kingdom’s two largest cities. Projects are under development across the country, with Mecca the location for some of the biggest changes.

“We believe it is a trend and the next boom will definitely be in the high-rise market,” says Joseph Daher, projects director at Al-Mabani. “We intend to be a part of it.”

Alleviating restrictions

“It is a trend that is moving west from Dubai. [The Saudi Arabian planning authorities] are taking measures to encourage the building of high-rise towers. They have more or less alleviated the restrictions on such buildings.”

According to one contractor, developers are submitting as many as three new high-rise plans a week to the Jeddah Municipality for review, which means an increase in work for contractors and consultants.

Marwan Saadeh, resident manager at the Jeddah branch of Khatib & Alami, says his company is involved in the design of three towers, including two on the corniche reaching 35 and 57 floors respectively. The latter could reach 250 metres in height.

The Jeddah-based contractor Al-Redwan Contracting Company is also involved with corniche projects. It is considering three towers in the area of between 40 and 65 floors in height.

“For Jeddah, there was a limitation to the height of buildings due to the proximity to the airport. Now they have changed these rules, allowing unlimited floors and are announcing projects of up to 60 storeys,” says Osama Adel, deputy manager of the bidding department at Al-Redwan.

While not as advanced as its Red Sea counterpart, the market in Riyadh is also developing fast. As well as the Kingdom Tower, the tallest of the country’s high-rises, the capital will be home to several new towers in the years to come. The tallest will be the 352-metre Al-Rahji tower, designed by the UK’s Atkins.

However, these structures will be dwarfed by Kingdom Holding’s plans to construct the country’s new tallest tower in Jeddah. The project is known as the Mile-High Tower, suggesting a height of 1,600 metres. However, sources close to the scheme have indicated that the final height is likely to be at least 500 metres shorter.

“The Mile-High Tower is now more like 1,100-1,150 metres,” says one source. “They have found it too difficult. There is a problem with profitability and also with the transport of materials to such a height, so there are real technical issues.”

Commercial opportunities

Local architects Omrania & Associates, in collaboration with US group Pickard Chilton, have worked on the design of the tower. The US’ Bechtel is the construction manager.

The tower forms part of a wider real estate project planned by Kingdom Holding in the north of the city.

The development covers 5.3 square kilometres and will have a value of SR50bn ($13.6bn) on completion.

High-profile, challenging projects such as this, coupled with the knowledge that many further projects are planned, are drawing global firms to the market. Among them is South Korea’s Samsung Corporation, which plans to open a Riyadh office before the end of 2008.

Samsung, in a joint venture with the UAE’s Arabtec and the local/Belgian Belhasa Six Construct, is currently constructing the world’s tallest tower, the Burj Dubai, which is now more than 630 metres in height. Samsung was previously involved in building the previous two record holders, Malaysia’s Petronas Towers and Taipei 101 in Taiwan.

Regulatory changes

Aside from the recent relaxation of the height-cap on urban construction, which was brought in earlier this year in Jeddah and Riyadh, both cities have encouraged developers to build higher by introducing a generous floor area ratio (Far) for commercial buildings.

This is a key factor in the construction of tall towers which sets the amount of floor space you can provide on any given plot. A typical Far in the kingdom is only 4:1, which means a building could have up to 4,000 sq m on a 1,000 sq m plot.

In Riyadh, the number of floors was previously dependent on the plot size. If the plot was 5,000 sq m or less, it could be up to 10 floors; if it was 5,000-10,000 sq m, it could reach 10-20 floors. However, the city now has a Far of 6.5:1, giving greater scope to developers and contractors. A 10,000 sq m site can now accommodate a tower with 65,000 sq m of floor space. Jeddah has adopted a similar approach, with a new Far for commercial areas of 6:1.

The Jeddah Chamber of Commerce is also encouraging local contractors to form partnerships to bid for the larger projects. According to one Jeddah-based contractor, the commonly held view is that, other than Saudi Binladin, Saudi Oger and Al-Mabani, few firms can tackle the megaprojects being developed, leaving the door open for foreign contractors.

Mohammed Fayez, senior vice-president with the local Zuhair Fayez Partnership Consultants, says such a move is essential if smaller local firms are to compete effectively. “If local firms can cluster together it would be better,” he says. “If they try to compete on their own they will be eaten alive.”

Samir Ashour, resident manager at Khatib & Alami, believes both cities are well set for the expected explosion in high-rise towers: “Riyadh is expanding in a big way and needs more space, more hotels and more building, but I believe the infrastructure can cope.”

The advent of high-rise buildings could strengthen the commercial presence of Jeddah: “It could be a competitive commercial centre, because it is in a good location and close to Medina,” he says.

The proliferation of high-rise towers is not just confined to the traditional commercial hubs of Saudi Arabia. Mecca is undergoing a major transformation as developers begin to capitalise on the potential of the most expensive land in Saudi Arabia.

Announcing plans

The massive Abraj al-Bait complex is under construction and will have seven towers, including a 577-metre-high structure.

On an even larger scale, the local Jiwar Real Estate Management, Marketing and Development Company announced plans late last year to build 21 towers within a few hundred metres of the Masjid al-Haram, the holiest site in Islam.

The SR22bn Rawabi Abraj al-Bait project, which has been designed by Dar al-Handasah, will have towers of between 25 and 65 floors. The project will cover 2.8 million sq m. It will be sold in blocks of five towers, and is mainly intended as serviced apartments for visiting pilgrims.

Saudi Binladin, which owns Jiwar, will carry out the construction work, which is expected to take five years to complete.

A second Saudi Binladin project in the city is the $2.7bn Jabal Omar project which it is building with Saudi Oger. Located near the Grand Mosque, the development will feature seven 35-floor towers and six five-star hotels over a 1 million sq m site. On completion, the development will accommodate 30,000-40,000 residents and handle up to 8 million pilgrims.

There can be no doubt that Saudi’s landscape will change markedly in the coming years. As the construction sector matures and more developers capitalise on the relaxation of building regulations, the major cities will start to look very different.

As the pace of high-rise development picks up, it is likely to encourage more to join in. Land owners will become more aware of the potential to replace existing two-floor buildings with a 20 or 30-floor tower, which will bring in greater returns.

However, there are risks. Housing a greatly increased number of people in the same area will place intense strain on the cities’ antiquated infrastructure networks. And while projects to modernise sewage and transport networks are under way, it remains to be seen if Saudi Arabia can act quickly enough to avoid the mistakes Dubai has made of accommodating a rapidly expanding population with inadequate infrastructure.

Saudi's tall towers

NameHeightDeveloperStatusValue ($)
Mile-High Tower, Jeddah1,150m - 1,600mKingdom HoldingTenders to be issued in July+10bn
Abraj al-Bait, Mecca577mSaudi BinladinUnder construction2.7bn
Jabal Omar, Mecca150mJabal Omar Development CompanyEPC contract awarded to Saudi Binladin and Saudi Oger2.7bn
Rawabi Abraj al-Bait, Mecca300mJiwar Real EstateUnder construction2.5bn
Lamar Towers, Jeddah310mCayan Investment and Development CompanyEPC bids submitted500m
Al-Rahji Tower, Riyadh352mSaleh bin Abdulaziz al-Rajhi Business CouncilEPC contract to be awarded early 2009500m
Dubai Towers, Jeddah448mSama DubaiDetailed design due to begin soon500m
Corniche Tower, Jeddah270mEmaarEPC bids submitted240m
Headquarters Business Park, Jeddah250mAldar al-Khasa for Urban DevelopmentEPC contracts to be awarded imminently214m
Diamond Tower, Jeddah388mAl-Masarat CompanyFinal stages of design133m

EPC=engineering, procurement and construction

Source: MEED

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