Skyscraper Curse? Saudi Arabia Plans To Construct Largest Buildings Ever
Business cycles and skyscraper construction usually correlate. The construction of tall buildings tends to begin during economic booms and is finished or stopped during bust phases.
The latest example is Saudi Arabia, planning to build a megacity with the world’s largest buildings in an unpopulated part of the country, according to Bloomberg, citing people familiar with the matter.
Sources say Saudi Crown Prince and de facto ruler Mohammed bin Salman is the architect behind the proposed half-trillion-dollar megacity development with twin skyscrapers towering 1,640 feet that extend horizontally for tens of miles. The skyscrapers would begin on the Red Sea coast and continue into the desert. The plan is to fill the buildings with residential, retail, and office space.
First announced in 2017, Neom is Prince Mohammed’s dream of transforming the Saudi economy from primarily fossil fuel to a high-tech hub, attracting foreign investment and talent to spark a new technological innovation wave.
Neom will be a futuristic, sustainable community joined together by The Line, a smart linear city without cars, joined by underground hyper-speed rail systems.
“The Line is an out-of-the-box idea. What we will present when we are ready to will be very well received, and will be viewed as revolutionary,” Neom CEO Nadhmi al-Nasr said.
Saudi Arabia is already home to Jeddah Tower, the world’s tallest building, measuring 2,192 feet tall (planned 3,300 feet). Construction on the building began in 2013 and has yet to be finished.
Andrew Lawrence, a property analyst, created the Skyscraper Index shows business cycles and tower construction correlate: Tall buildings often begin during an expansion and are completed after or before a recession.
Jeddah Tower is still unfinished as global central banks furiously hike interest rates to tame inflation as a stagflationary environment morphs into what could soon be a global downturn. Goldman Sachs has quietly published a “Recession Manual” (available to professional subscribers) for wealthy clients.
The question is if unfished Jeddah Tower signals recession ahead and if the funding of the Prince’s mega-project Neom signals a future trough.
Thu, 06/02/2022 – 04:15