Building into the unknown: What is the business model behind Jeddah's plans for the world's next tallest tower?

“The world’s cities are in the midst of a skyscraper building boom,” is the conclusion of the latest Skyscraper Index from real estate analyst Knight Frank this month.

Skyscrapers — classed as buildings over 350 feet (106 metres) high – are a rising tide in the modern global city, it claims. London has added 23 new skyscrapers since the year 2000, compared to just 17 during the previous four decades.

New York, often considered the birthplace of the skyscraper, added four new towers in 2014 alone and Dubai, which has firmly snatched the title from the Big Apple in recent decades, has built nearly 190 skyscrapers in the last 15 years.

However, while Dubai’s 828-metre, 163-storey Burj Khalifa currently holds the record as the world’s tallest tower, the title will soon move to a rather surprising location: Jeddah in Saudi Arabia.

With construction started in April 2013, Jeddah’s Kingdom Tower is already 14 floors high and is set to be opened in 2018. The brainchild of Saudi billionaire Prince Alwaleed Bin Talal Bin Abdulaziz Al Saud, a massive third of the tower’s $1.2bn construction bill has been spent on what has been described as ‘soft costs’ — the design, research and development — which is considered unheard of in the industry and demonstrates that this tower is indeed more about building an icon rather than building a business plan.

In the past, New York decided to build upwards because land prices were so steep in the popular Manhattan business district, while Dubai’s Burj Khalifa was designed to be part of its drive to diversify from oil and help be a showcase for the emirate’s drive to attract 20 million visitors a year by the year 2020. Jeddah is hardly short on land, while its observation deck is unlikely to show anything more than sand dunes. So what is the thinking behind Kingdom Tower?

“First of all the tower is the brainchild of His Royal Highness Prince Alwaleed Bin Talal and I think the tower will reposition the city of Jeddah alongside international cities and it will have an icon, it will have a landmark,” says Mounib Hammoud, CEO of Jeddah Economic Company (JEC), the company behind the construction and development of Kingdom Tower.