June 14 (Bloomberg) -- Emaar Properties PJSC, the United Arab Emirates’ largest real-estate company, surged to a seven- month high in Dubai trading after winning the contract to build the world’s highest building from Kingdom Holding Co.

Emaar rose as much as 8 percent to 4.21 dirhams, the highest since November, and traded at 4.15 dirhams as of 11:32 a.m. The Dubai-based company will build the 1,000-meter (3,280- foot) tower in Jeddah, Saudi Arabia, and the surrounding Kingdom City, in a 100 billion-riyal ($26.6 billion) project.

“The deal’s size is potentially very significant and game- changing for Emaar,” Ali Khan, head of cash-equity trading at Dubai-based Arqaam Capital Ltd., wrote in an e-mail. “Emaar is fundamentally sound. If there is one thing the stock lacked it was a short-term catalyst, which is what this deal provides.”

U.A.E. developers are searching for new markets after banks cut back on mortgage loans and speculators exited the market. Saudi Arabia, the world’s largest supplier of oil, plans to spend $400 billion on infrastructure projects in the next five years as it seeks to benefit from lower construction costs.

Arabtec Construction LLC, a unit of Dubai-based Arabtec Holding PJSC, will start a subsidiary in Saudi Arabia in partnership with a unit of the Saudi Bin Laden Group and Prime International Group Services Ltd., Riad Kamal, Arabtec’s chief executive officer, said in March. Arabtec, the U.A.E.’s biggest construction company, said last week it won a contract worth 2 billion riyals to build a luxury tower in Jeddah.

Deyaar Development PJSC, the property company that has put a quarter of its projects in Dubai on hold, is in “very advanced” talks to build homes and offices in Saudi Arabia, CEO Markus Giebel said in February.

Al Mal Capital PSC raised its price estimate on Emaar 7.2 percent today, citing the Saudi Arabian contract.

“This announcement underscores Emaar’s position as the preeminent Middle East developer,” Al Mal analyst Bobby Sarkar said in a note to clients. Al Mal raised the share-price estimate to 4.44 dirhams from 4.14 dirhams.

To contact the reporter on this story: Zainab Fattah in Dubai on zfattah@bloomberg.netVivian Salama in Dubai at vsalama@bloomberg.net

Last Updated: June 14, 2009 03:38 EDT