Designed to reach a kilometer above ground and soar above the nearby Red Sea, the under-construction Jeddah Tower in Saudi Arabia, primed to be the world's tallest, symbolizes oversized ambition. It's meant to be a showpiece of Saudi pride and an engine for development in the nation's second-largest city. But bragging rights aside, economic trends suggest this massive, $1.5 billion tower, anchor of a massive proposed commercial development, may potentially be too big for its own good. Facing financial pressure and an uncertain market, according to a Wall Street Journal article, this engineering feat faces a number of economic challenges.
While the private joint venture footing the bill, the Jeddah Economic Company, secured enough money last fall to complete phase I of the project (the 3,821-foot-tall tower plus some surrounding buildings), various economic factors are putting a strain on the larger developments expected to eventually take root nearby. The worldwide drop in oil prices has constrained the Saudi economy, making the completion of an estimated $20 billion in additional commercial and residential developments a question mark. In a quest to recreate the economic impact of Dubai, plans in Jeddah also face a cultural hurdle; more conservative Saudi Arabia may not have nearly as easy a time attracting foreign companies. Liberalization would be needed to give Jeddah a true chance at becoming a global city, according to analysts.
There's also the shaky record of selling real estate in the world's tallest towers, including the current record-holder, the Burj Khalifa. The Shard in London struggled early on to find tenants, in part due to being across the Thames from potentially lucrative financial firms. One World Trade was forced to cut rents shortly after opening due to poor sales.
A massive influx of new commercial space would disrupt any market, and a development project of this magnitude requires patience and years of work to pay off. But, facing numerous headwinds, the Jeddah Tower is far from a sure bet. Despite the grandiose description and staggering dimensions, the planned world's tallest tower won't necessarily follow an "if you built it, they will come" script.
∙ Saudi City of Jeddah Aims to Build World's Tallest Tower [Wall Street Journal]
∙ The 10 Tallest Buildings Under Construction or In Development [Curbed]