Vertical boom: Why sky-high is the limit for the Asian housing market

Shanghai World Center and the Shanghai Tower

Asia is now the centre of the world’s skyscraper construction boom – a boom fuelled by rapid urbanisation and soaring ambition.

Images of Shanghai’s Pudong district from the late 1980s show mostly low warehouses and wharves. But Pudong’s western tip, on the curve of the Huangpu River, now epitomises the skyscraper boom of the early 2000s.

The boom has seen supertall buildings go up everywhere – but no more so than in Pudong. It now hosts buildings including the 492-metre Shanghai World Financial Centre, the 421-metre Jin Mao Tower, and the iconic Oriental Pearl communications tower. Looming above all of them, just months from opening, is the mammoth, double-skinned Shanghai Tower. At 632 metres it is, at least for a year or two, the world’s second-tallest building.

Shanghai leads the Asian skyscraper boom, and Asia leads the way in a global boom that saw a record 97 buildings of 200 metres or taller completed around the world last year.

Research from the Council of Tall Buildings and Urban Habitat (CTBUH), the leading authority in the field of tall buildings, shows that the world was home to 266 such buildings in the year 2000. Last year, that number had surged to 935.

Of the 96 towers completed last year, 58 were in China. Asia as a whole accounted for 76 per cent of 2014’s “supertall” skyscrapers, with buildings such as the Busan International Finance Center Landmark Tower (289m), Wuhan’s PTJ International Finance Center (264m) and the Lotte Center in Hanoi (272m). Indeed, there is so much building in Asia, the Chicago-based CTBUH opened a China office this year.

Related: The world's 10 tallest skyscrapers

What can explain this vertical boom? While some skyscrapers of the 20th century could be seen as symbols of corporate vanity, with their monikers projecting the power of a single organisation – Chicago’s Sears Tower (now renamed the Willis Tower) or New York’s iconic Chrysler Building – tall buildings today signify much more. In China, in particular, they are a sign of increasing urbanisation. And they have also come to represent the ambitions of entire cities eager to accelerate the development of their financial markets. Colossal new skylines are appearing.

According to the CTBUH, the tallest office buildings in Asia often attract development support from governments keen to reposition their economy or establish their city as a financial centre. Taipei 101, the 508-metre office building that was the world’s tallest until 2010, was constructed in part to boost Taipei’s finance industry. It became the world’s tallest building in 2004 by surpassing Kuala Lumpur’s Petronas Towers, built to help the Malaysian Government expand that country’s finance sector.

In China today, the 439-metre Guangzhou IFC, home to the Bank of America, Allianz Insurance and Alcatel, was primarily developed by Yue Xiu Properties, a company set up by the Guangzhou government to pursue economic and trade development opportunities with Hong Kong. Shenzhen’s KK 100, which includes 68 floors of office space and the St. Regis Hotel, was built by Kingkey Real Estate Development Company Limited, whose founder Chen Hua has been prominent in Chinese civil service organisations.

Homes in the sky

While more than half of the tenant mix of Asia’s mega-skyscrapers comes from the banking and finance sector, supertall buildings are not mere flagpoles for cities marking their place in the global market. Daniel Safarik, director of the CTBUH China office, says the vast majority of tall buildings are now being erected to support urbanisation.

“It’s particularly in places like China, where there is a very conscious scheme to move people from the countryside into the cities on a scale that’s never been seen in the world, in an effort to create a consumer society virtually overnight,” he explains.

The United Nations’ 2014 World Urbanization Prospects report predicts that China will add another 292 million urban dwellers by 2050. And its new entrants on the tall buildings list include towers in 29 cities that not long ago had barely a tall building to speak of.

Height brings economies of scale. Put simply, housing the same number of people in a 50-storey building as in a series of five-storey buildings requires about one-tenth of the land.

“At some point you just don’t need to go [higher] because the penalties outweigh the benefits.” Karl Fender, Fender Katsalidis

Karl Fender, founding director of architecture firm Fender Katsalidis, sees height as a valuable space saver. His firm designed Melbourne’s Eureka Tower and the new Australia 108, the residential complex which will soar 319 metres above the Melbourne streetscape in 2019. “Australia 108 has over 1100 apartments,” he says, “and if they were spread out over the ground they’d be at least an hour away and would occupy 700-800 acres [about 3sq km].”

But it’s not as if the sky’s the limit. The higher you build, the greater the price (see “The Costs of Going High” at right). “There’s a whole lot of interacting factors, which means at some point you just don’t need to go [higher] because the penalties outweigh the benefits, other than being able to say ‘this is so high’,” Fender explains. “So in terms of huge heights – two kilometres or whatever – it’s probably not a feasible thing to do.”

Related: The mega-trouble with megaprojects

Even buildings of 100 floors or so tend to be risky financial propositions. Emaar, the developer of the world’s tallest building, Dubai’s 828-metre Burj Khalifa, made its significant profit not from the skyscraper itself but from the purchase of its surrounding land. “If it had been done as an isolated project and the developers hadn’t owned the surrounding land and could not capitalise on the iconicity of that building, I don’t think it would have been a financial success,” observes CTBUH’s Safarik.

Like so many supertall constructions, Burj Khalifa has what CTBUH describes as “vanity height” – the distance between a building’s highest occupiable floor and its architectural top.

With Burj Khalifa the top occupiable floor is about 628 metres, which would make it the eleventh tallest building in Europe. But with the 200-metre spire on top? That can be seen from a distance of 95km and bumps up the tower to world’s tallest status.

“You’re dealing with symbolic capital as opposed to energy value and common sense,” says Philip Goad, professor of architecture at the University of Melbourne and director of the Melbourne School of Design.

“I think sometimes common sense goes out the window when people want to create an icon or complete a skyline or when a city might have an identity crisis.”

"You're dealing with symbolic capital as opposed to energy saving and common sense." Philip Goad, University of Melbourne

New York’s Chrysler Building and the rival Empire State Building were both started in a boom and completed during the Great Depression of the 1930s. Today, skyscrapers still take years to build. So our skylines will continue to expand for several years no matter what the course of the economy.

And Asia will continue to lead the charge. Over the next five years, the number of supertall office buildings in China and South Korea will surge, and Indonesia will join the race to the top, with its 638-metre Signature Tower in Jakarta set to become the world’s fifth tallest building on completion in 2020. And the needle-pointed, kilometre-high Kingdom Tower in Saudi Arabia is still rising up towards a 2019 completion.

But will demand from both the finance sector and potential residents keep supporting this boom? It’s something Safarik wonders about. “Is it possible that we’ve already reached a point of overbuilding? Perhaps,” he says. But he adds: “I still see a lot of cranes up in the sky here.”

“The tallest office buildings in Asia often attract development support from governments.”

The costs of going high

Increased height poses money-sapping challenges:

  • Temperature. The higher you go, the greater the need for temperature control, and heating and cooling require intense energy use.
  • Lifts. Vertical transportation costs also increase with height. Lifts account for about 10 per cent of a tall building’s energy use.
  • Lighting. This can make up 20 per cent of energy costs.
  • Wind. Tall buildings sway in the wind, and bracing techniques are a necessary expense.
  • Earthquakes. Seismic forces are another consideration, particularly in regions such as Japan and coastal China.
  • Size itself. The higher the building, the wider it has to be to accommodate the core, that unleasable section which holds the building services and lifts.

Tall and green

As buildings go taller, greater emphasis must be placed on environmental sustainability. Australia, where two skyscrapers of more than 200 metres were completed last year, has been effective in containing the environmental impact of its tall buildings.

A 2013 report from ClimateWorks Australia shows that while the number of tall buildings in Australia is increasing, the energy used per square metre to run them is dropping, with a decrease of 3 per cent noted between 2002 and 2011. This is due to mandatory standards for building, as well as compliance to voluntary standards, such as Green Star for commercial buildings.

“We can’t stop the fact that we are going to go up because of our increasing population,” says Romilly Madew, chief executive of the Green Building Council of Australia. “What we can do is ensure that whatever we build has the lightest footprint that it possibly can and that means our voluntary and regulatory codes keep moving with the times.”

In China, the US$2.4 billion Shanghai Tower will be one of the world’s greenest tall office buildings. Its twisting double-glass façade will operate as a transparent second skin, reducing the building’s carbon footprint by 34,000 tonnes per year. Wind turbines installed on top of the 632-metre skyscraper will power exterior lighting, and the project’s water treatment plants will recycle grey water and storm water for irrigation and toilet flushing.

Life in the sky

As vertical living continues to grow, how can we retain a similar quality of life to what we enjoy at street level? Travelling all the way from the 90th floor to the ground for a carton of milk is impractical to say the least, and life at the top can be isolating. But what if you could connect buildings at height?

Developments in elevator technology suggest we may soon be moving sideways through a building as well as taking vertical path. German manufacturer ThyssenKrupp has developed MULTI technology, which allows lift compartments to be stacked on top of each other to serve multiple floors in a single shaft.

This technology suggests that the horizontal and vertical transportation systems that make tall buildings work can be better integrated, and you can actually have several junctures between buildings,” says Daniel Safarik, from the Council of Tall Buildings and Urban Habitat.

Such horizontal connections expand the possibilities. “We would have more services between buildings at height, as well as full recreational opportunities and parks. We’ve been seeing it for years in sci-fi films like Metropolis and Blade Runner. It keeps recurring because it’s actually quite practical.”

This article is from the June issue of INTHEBLACK.

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