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One of Saudi Arabia’s richest tycoons has launched a comeback attempt, reviving a project to build the world’s tallest tower as developers in the kingdom embark on a flurry of glitzy real estate projects.
Work restarted this week on the Jeddah Tower, which at more than 1,000 metres is set to surpass the 828-metre Burj Khalifa in neighbouring Dubai as the world’s tallest building when completed in 2028.
It is the most high-profile deal involving billionaire Prince Alwaleed bin Talal and his Kingdom Holding Co since he was detained in Riyadh’s Ritz-Carlton in an anti-corruption drive in 2017. The project started in 2013 but stalled following the crackdown.
“We’re back,” Prince Alwaleed posted on X this week alongside a video rendering of the project, touring the site in his trademark aviator-style sunglasses.
It is among a series of high-end real estate announcements this week, which come as Saudi Arabia competes with rival financial hubs such as Dubai for global businesses and tourists despite an economic slowdown.
Hyatt said it would partner on two luxury hotels at Neom, the futuristic city on the country’s north-west coast that is a centrepiece of Crown Prince Mohammed bin Salman’s Vision 2030 project. Marriott International also revealed plans to open a Ritz-Carlton resort on the Red Sea island of Amaala next year.
While the government plans to cut spending next year amid concerns about a widening budget deficit due to declining oil revenues, the announcements indicate there is still appetite for high-profile projects in a bid to attract foreign investors and visitors and help diversify away from hydrocarbons.
“The Saudis understand that they need to be smart about development and also maintain economic momentum,” said Robert Mogielnicki, senior resident scholar at the Arab Gulf States Institute in Washington. “Creating a buzz around projects helps feed a sense of excitement around the economic transformation agenda.”
The Jeddah Tower — whose shape is meant to evoke “a bundle of leaves shooting up from the ground” — was one of the most ambitious projects by Prince Alwaleed, who made his fortune in real estate and banking before building a global portfolio that included stakes in Disney and Apple.
But it stalled after both he and senior executives from Saudi Binladin Group, a partner in the tower project and its main contractor, were caught up in an extraordinary anti-corruption campaign launched by the crown prince as he rose to power in 2017.
Several hundred princes, businessmen and senior officials were arrested and held in the Riyadh Ritz-Carlton hotel. The charges against them were not made public, and most of them were released after reaching undisclosed settlements with the government, which said it secured $100bn.
Prince Alwaleed, who was detained for more than two months, was released after reaching what he called a “confidential and secret agreement” with the government. He has done multiple other deals since, investing in Citibank last year.
He agreed in 2022 to sell 16.87 per cent of KHC to the state sovereign wealth fund, the Public Investment Fund, and SBG was restructured after the government appropriated a large stake in the firm as part of the settlement for the corruption allegations.
An associate firm of Kingdom Holding signed a SR7.2bn ($1.9bn) agreement with SBG to resume construction this week.
Dubai, one of seven sheikhdoms that comprise the United Arab Emirates, has been the region’s financial hub for the past three decades.
But Saudi Arabia has been aggressively pressing multinational companies to relocate their regional headquarters to the kingdom, warning businesses that they would miss out on lucrative government contracts if they don’t base their operations in the country.
The government said this week that 517 companies, 30 per cent of them Fortune 500 companies, had been licensed to establish their regional headquarters in Riyadh.
“There is a clear competition as there are only so many business hubs a region can support,” said Steffen Hertog, an expert on the Gulf’s political economy at the London School of Economics.
Hertog said issues such as “operating costs, the local skills basis, labour nationalisation rules, the local regulatory environment and the Saudi lifestyle offering . . . will decide how much [Saudi Arabia] can become a regional and global business hub”.