Are the emerging markets obsessed with skyscrapers?
In the past 15 years, construction in emerging markets has changed drastically with 190 new skyscrapers having been built in Dubai compared to just 23 in London.
By the end of next year there will be 800 buildings above 152m tall in China while FMG estimates the country will build enough of these huge buildings by 2025 to fill 10 cities the size of New York.
Data from the Skyscraper Center reveals Jakarta now boasts over 160 buildings taller than 100 meters and, only last month, a deal was confirmed to build the world’s tallest tower in Saudi Arabia.
Knight Frank’s Skyscrapers 2015 report refers to skyscrapers as “the optimum means of addressing major economic and geographic challenges facing cities today”. Many cities in the emerging markets are experiencing rapid development, in terms of economic, industrial and population growth, and infrastructural improvements.
Many of the bigger cities in these developing countries – such as Jakarta, Metro Manila, Mexico City and Colombo – are experiencing rapid urbanization. This, coupled with extreme population growth, is resulting in a major gap between the supply and demand of residential real estate and commercial units.
As a result, taller buildings have to be built to keep up with demand.
Paul Philipp Hermann, co-founder and managing director of emerging markets-focused real estate platform Lamudi Global, comments: “Skyscrapers are increasingly popular in the emerging markets, not just for house-hunters looking for residential housing, but for real estate investors too. These developments address the issue of land shortages, overcrowding, supply versus demand, and lacking business space, all in one building.”
Not only are more residents moving into these emerging markets but businesses are too. So many companies now operate worldwide and need offices in all their major locations. This rise in demand for mixed-use developments means that skyscrapers – which are perfect for this – are going up rapidly to make the best use of available space.