DUBAI, (Reuters) – Kingdom Holding , owned by Saudi billionaire Prince Alwaleed bin Talal, said on Tuesday an associate firm signed a contract worth 4.6 billion riyals ($1.23 billion) with Bin Laden Group to build the world’s tallest tower in Jeddah.

The proposed tower will stretch a kilometre high and include a hotel, serviced apartments, luxury condominiums and offices, Kingdom said in a statement.

If completed, the tower will replace Dubai’s Burj Khalifa, standing 828 metres tall, as the tallest tower in the world. The Burj Khalifa was built by Emaar Properties for a total cost of $1.5 billion.

The tower is part of the first phase of Kingdom City, which is being built north of the Red Sea port city.

Kingdom said the associate firm, Jeddah Economic Co., will be 16.63 percent-owned by the Bin Laden Group while Kingdom will hold a 33.35 percent stake in the venture.

Abrar International Holding Co. will also have a 33.35 percent stake while businessman Abdurrahman Sharbatly will own 16.67 percent.

Last month, Kingdom reported a 21-percent rise in second-quarter net profit helped by higher income from its investments.