Barclay's Andrew Lawrence
TNN | Jan 12, 2012,
WASHINGTON: Construction of great highrises precedes major economic downturns. A property analyst with Barclay's Capital has contended that a boom in skyscraper construction foreshadows economic bust, and warned that China and India are in for a reality - and realty - check, given how they are reaching for the clouds.
Skyscrapers are defined as buildings over 240 meters tall. By that token, China is home to more than half of the world's skyscrapers currently under construction (75 out of around 124). India is a distant second with 14 in the works, but Mumbai will be home to the second tallest structure, 720-meter India Tower, which when completed will be overshadowed only by Dubai's 828-meter Burj Khalifa, the world's tallest building, and will be ahead of the 632-meter Shanghai Tower, according to the Council on Tall Buildings and Urban Habitat.
But these are not causes for celebration, cautions Barclay's Andrew Lawrence. Having studied the link between highrises and downturns , Lawrence warns in his annual skyscraper index report released this week that China and India may be in for a bust. Over the past 140 years completion of skyscrapers has coincided with periods of economic turmoil such as the Great Depression (which followed construction of New York City's Empire State Building and Chrysler Building (in the 1930s), the economic crisis of 1974 following the completion of World Trade Center complex and Chicago's Sears Towers), and the Asian financial contagion (which came after the Kuala Lumpur's Petronas Towers).
"If history proves to be right, this building boom could simply be a reflection of a misallocation of capital, which may result in an economic correction in the next five years," Lawrence wrote in the report, noting that India was playing "catch-up " with China.
No comments:
Post a Comment