Is UAE, Saudi high-rise duel a sign of economic trouble or even bubble?

January 3, 2018 4:25 pm


The taller they go the harder they fall:  Does this apply to high-rises in the Middle East?

In particular high-rises is a strong feature of the UAE landscape but surprisingly enough it was low on the list of the world’s highest number of skyscrapers in 2017.

Dubai built 4 new skyscrapers in 2017 compared to 76 buildings at 200 meters tall or higher in China which makes the Asian country home to the biggest number of skyscrapers built in 2017.

According to Statista, in 2017, 144 new buildings 200 meters (660 feet) or taller were built, including 15 “super tall buildings” at least 300 meters (980 feet) high.

While Dubai still retains the first place when it comes to the highest skyscraper in the world, this may not last for long as the region will witness new comers soon.

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Region’s skyscrapers

According to The Mysterious World (TMW), a platform for planet news, there are 148 skyscrapers and 917 high-rise buildings in Dubai.

TMW reveals that the tallest skyscrapers in Dubai are Burj Khalifa (828.18 meters), Princess Towers (413.30), 23 Marina (393), Elite Residence (380.3) and Almas Tower (360 meters).

While Burj khalifa is famous for being the tallest building in Dubai, a newer high-rise will steal the limelight

The Tower, which will involve the insertion of 145 barrettes 75m deep into the ground to make up a stable core for the 928m tower, will steal the limelight in 2018, according to Forbes.

Regardless, the 3rd tallest Dubai skyscraper set for completion by 2020 will be Dynamic Tower at 420m tall, and will have separate rotating floors attached to a central column.

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In 2019, attention will turn all the away from Dubai to Saudi when the 1km high Jeddah Tower covering an area of 5.3 million sqm will break new world records for tallest building, highest occupied floor, highest architectural top, highest tip and highest sky terrace.

Dwarfing all of that will be a high rise of new proportions in one of the unlikeliest places on earth: Iraq.

A new 1,152 meters high tower “the Bride,” will make the scene in 2025, according to CNBC.

“The construction will be made of four conjoined towers, the tallest of which, Tower 1, will stand 964 meters high, with a 188 meter high antenna,” it said.

Are towers an indicator for a country’s economy?

Source: Statista

A towering bubble trouble

A study by Forbes suggests that skyscrapers are a great bubble indicator.

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It says that skyscrapers are rarely, if ever, built by their intended occupants or with committed tenants. “”Build it and they will come” captures the prevailing spirit. Thus you can think of the world’s tallest skyscrapers as indicators of lofty overconfidence,” it says.

“Skyscrapers are actually a spectacular indicator of bubbly conditions,” it says.

According to Sia Magazin, a news platform, skyscrapers are usually associated with economic success, but some economists say they’re the sign of a financial bubble about to burst.

“Business cycles and skyscraper construction correlate in such a way that investment in skyscrapers peaks when cyclical growth is exhausted and the economy is ready for recession,” it says.

So could China or UAE be facing an imminent economic bubble?

City Lab, a platform for news about cities, reveals that China’s obsession with skyscrapers is a reflection of its rapid urbanization, as it undergoes what researchers say is the largest human migration in history.

“But for all the government’s efforts to attract tenants with swanky high-rises and high-tech amenities, some economists and investors warn of a potential property bubble. Some of the most lavish buildings in China’s megacities, like the Shanghai Tower—the country’s tallest tower, completed last year—sit largely empty,” it says.

A study published a year ago by LinkedIn says that Burj Khalifa opened during a Dubai debt crisis on January 4th, 2010, when the worst of the financial crisis was already behind.

“But construction had already started in 2004, so the tower was almost complete in late 2008 at the depth of the crisis.”

 

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Dana Halawi
By Dana Halawi
Senior Journalist
Dana Halawi has over seven years of experience in Journalism with articles published in multiple magazines and a newspaper in Lebanon. She specialized in Banking and Finance at the Lebanese American University and has a Master’s degree in International Affairs.



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