Saudi contractors seek international partners as high-rise takes off

23 May 2008
Demand for tall buildings set to soar following lifting of height restrictions.

Saudi contractors are seeking to form partnerships with inter-national firms to capitalise on the predicted boom in demand for high-rise towers, following the lifting of building height restrictions in Riyadh and Jeddah.

With the height cap removed, the skyline of each city is set to change dramatically. In Riyadh, plans are being developed for three major towers. These are the 350-metre Al-Rahji tower and two towers over 200 metres in the centre of the city.

Activity is even stronger in the second city of Jeddah. According to local contractors, city authorities are reviewing three proposals a week for high-rise towers, with at least 10 awaiting approval.

Towers already being developed include Sama Dubai’s Dubai Towers Jeddah, measuring over 300 metres, the 310-metre Lamar Towers, and the 250-metre Headquarters Business Park. All will be dwarfed by the Mile High Tower in the city planned by Riyadh-based Kingdom Holding, which is likely to be close to 1,100 metres tall (MEED 16:5:08).

“I think local companies such as us will have to establish partnerships with specialised com-panies like Arabtec and ACC,” says Joseph Daher, projects director at Al-Mabani.

“Those companies have already been through this experience in Dubai and Abu Dhabi, so it makes sense.”

He adds that clients are endorsing such partnerships when they include a local company.

“Instead of inviting foreign companies to come in with expensive offers, customers are inviting local firms to bid for projects, then asking them to partner with other companies that are experienced in high-rise construction,” he says.

“The next boom in Saudi Arabia will be for tall tower construction. It is a trend in the Middle East and is moving west from Dubai to Abu Dhabi, Riyadh and Jeddah. The construction of tall buildings is being encouraged.”

To encourage high-rise developments, Jeddah has put in place a floor area ratio of 6:1, which sets the amount of floor space in a building in proportion to the size of its plot. This is far higher than the typical ratio of less than 4:1. Riyadh has set a ratio of 6.5:1 for commercial property.

However, some concerns have been raised about the impact that these structures will have on the provision of basic services and infrastructure.

“The problem is there are not enough services,” says Marwan Saadeh, resident manager at the Jeddah office of consultant Khatib & Alami. “There is not enough power, water or telephone lines, so it all must be updated.”

Jeddah Municipality is carrying out a study on ways to improve transport along the Corniche road in anticipation of the increased numbers in the area. This is expected to be completed by the end of the year.

To raise money for improvements, a fee is being levied on developers building tall, with the level set at a different rate for each project. “For a project such as our Headquarters Business Park, the muni-cipality will give you a limit,” says Raed al-Shakhsheer, special projects manager at Aldar al-Khasa. “We were told 140 metres, and for each metre above that you have to pay a fee of SR35,000 [$9,333].”

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