Thread: World's tallest building set to open in Dubai.

World's tallest building set to open in Dubai
By Malcolm Borthwick
Editor, Middle East Business Report, BBC World, Dubai



In recent years Dubai has grabbed the headlines with audacious offshore islands, rotating buildings and a seven star hotel. On Monday it opens the world's tallest building, Burj Dubai.

It's about twice the height of the Empire State Building, you can see its spire from 95km away and the exterior is covered in about 26,000 glass panels, which glisten in the midday desert sun.



The design of the building posed unprecedented technical and logistical challenges, not just because of its height, but also because Dubai is susceptible to high winds and is close to a geological fault line.

"You have the solutions for it but you always wonder how it will really work," Mohamed Ali Alabbar, chairman of Emaar, the developer behind Burj Dubai told the BBC.

"We have been hit with lightning twice, there was a big earthquake last year that came across from Iran, and we have had all types of wind which has hit us when we were building. The results have been good and I salute the designers and professionals who helped build it."

West to East shift

One of the companies behind the Burj was the Canadian-based wind engineering firm RWDI. Extreme wind speeds on the ground in Dubai can reach 50km an hour. At the top of the building it can be three times as fast.

Wayne Boulton, general manager of RWDI's wind engineering team in the Middle East, explains how they tested the building for wind resistance.

"We constructed a scale model and put it in a wind tunnel," he says. "In the wind tunnel we are able to test a number of different wind speeds and directions. We can test the pressure you would get on the surface of the building under normal conditions and also under more extreme events."

Standing at over 800 metres, Burj Dubai has easily smashed the previous world record, Taiwan's Taipei 101, which is 508 metres high. The last couple of decades have seen a shift in the building of skyscrapers from the West to the East. Four out of five of the world's tallest buildings are in Asia and the Middle East.

"It comes down to confidence," says Andrew Charlesworth from property consultants Jones Lang LaSalle. "A lot of these emerging economies see themselves as important players in the world and want to show they can deliver these sort of projects.

"The wealth of the world is shifting from the West to the East and emerging economies want to highlight their future expectations in terms of where they are gong to be positioning themselves globally."

White elephant?

Dubai is a city of superlatives, where everything has to be the biggest and the boldest. But like many of the world's past tallest buildings, Burj Dubai was planned and built during the boom years, and finished during a property crash. The Empire State Building was completed during the Great Depression in the 1930s and the Petronas Towers in Malaysia during the 1990s Asian financial crisis.

This has led many to question whether this latest record breaker is a white elephant. Though Mohamed Ali Alabbar argues it is anything but.

"As of today we have sold 90% of the building and we expect it to be 90%-occupied," he says. "We were lucky to make more than a 10% return. Originally we thought we'd be lucky to break even, because we can make so much money from the land around Burj Dubai which is a 500-acre site."

BURJ DUBAI IN NUMBERS
95 : distance in km at which its spire can be seen
504 : rise in metres of its main service lift
57 : number of lifts
49 : number of office floors
1,044 : number of residential apartments
900 : length in feet of the fountain at the foot of the tower, the world's tallest performing
28,261 : number of glass panels on the exterior of the tower

The fact that the developer has made a profit on its $1.5bn (£928m) investment has been helped by the fact that it bought the land with equity and not cash, and that it pre-sold most of the apartments and offices before the property crash.

Investors have already handed over 80% of the value of the apartments and offices, and will pay the remaining 20% on moving in. And in contrast to many unfinished developments in Dubai, the default rate among investors has been low.

But for investors, it has been a mixed picture. Fortunes have been won and lost on the Dubai property market, which has collapsed in spectacular fashion. Like many properties here, Burj Dubai was sold "off-plan" or before the building was completed. Offices and apartments went on sale in 2004 and most were snapped up by both local and international investors in just two days.

Mohamed Abdul Hadi is one local investor who made millions out of Burj Dubai long before the building was completed. "In 2007 we bought three floors on Burj Dubai," he told the BBC. "The first investor paid 2,500 UAE dirhams ($680; £420) per square foot. We bought at AED 3,500 and one year later we sold at around AED 5,000. Look at the profit, where else can you have this but Dubai? And with no taxes."

Oversupply

But those who invested late will be nursing large losses, according to Saud
Masud, a real estate analyst at Swiss investment bank UBS. "Late stage investors may find this a lot more challenging because property prices in Dubai have come down by 50% and we think prices are likely to go down another 30%," he says.

"We have an oversupply in the property market today. We think it will reach 25% to 30% vacancy rates for residential property in a year's time, and for commercial property it's already 40%. Burj Dubai is not immune to that."

The landscape of Dubai has changed dramatically over the last two decades.
Sheikh Zayed Road is the 12-lane super-highway which runs through the city and is named after the UAE's founding father. Twenty years ago there were just a few tall buildings here, now there are hundreds, all jostling for space. But in the three years that I've been here, the frenzied pace of construction has slowed down and many cranes now stand idle.

Developers are holding back on new multi-billion dollar flagship projects and focusing on finishing existing projects instead. About $190bn worth of Dubai real estate projects are currently on hold, according to Middle East Economic Digest.

As in many parts of the world, banks are reluctant to lend and investors are reluctant to spend. Burj Dubai could mark the end of an era for skyscrapers in the Gulf - at least in the short term.


Story from BBC NEWS:
BBC News - World's tallest building set to open in Dubai

Published: 2010/01/03 1704 GMT

© BBC MMX

Not the first time the correlation between building the world's tallest phallic symbol and a subsequent economic crash has been noted on TD:
World's tallest skyscraper is now Dubai's tower of sour | News for Dallas, Texas | Dallas Morning News | Dallas Business News

DUBAI, United Arab Emirates – When work began in 2004 to build the world's tallest tower, Dubai's confidence was sky high, with a host of mega-projects on the drawing board or rising from the sands. That swagger seems positively old school these days. It's been tripped up by a debt crunch that has humbled Dubai's leaders and exposed the shaky foundations of the city-state's boom years – leaving the planned Jan. 4 opening of the Burj Dubai with a double significance of hello and goodbye.

It will be both a debutante bash for a new architectural landmark and a farewell toast to Dubai's age of excess.

The Burj Dubai – a steel-and-glass needle rising more than a half-mile – may be the last completed work from Dubai's time of the giants. Most other unfinished super-projects announced in recent years, such as a second palm-shaped island and a tower to surpass the Burj Dubai, are either recession roadkill or being considered on a far smaller scale.

Dubai last week dropped what amounted to a financial bombshell, announcing that its main government-backed development group, Dubai World, needed at least a six-month breather from creditors owed nearly $60 billion.

World markets had known a day of fiscal reckoning was creeping up on what was once the world's fastest-growing city, swelling from about 700,000 in 1995 to more than 1.3 million today. But the depths of Dubai's red ink seemed to surprise everyone, rattling stock exchanges from Hong Kong to New York and adding exclamation points to obits-in-progress on the death of Dubai's golden years.

The Burj Dubai gala is now a welcome diversion.

"This tower was conceived as a monument to Dubai's place on the international stage," said Christopher Davidson, a professor at the University of Durham in Britain who has written extensively about the United Arab Emirates. "It's now like a last hurrah to the boom years."

It's not the first time a skyscraper has gone up as the economy swooned.

New York's 102-story Empire State Building was designed as the world's tallest building just before the 1929 stock market crash and opened in 1931 as the Great Depression was taking hold. In 1999, the Petronas Towers in Kuala Lumpur, Malaysia, officially opened to claim the world-tallest crown – two years after the financial meltdown of the once-soaring Southeast Asian economies.