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Dubai residents remember January 4, 2010, when the Burj Khalifa, the tallest building in the world, was opened in a remarkable ceremony accompanied by magnificent fireworks at a time when the global financial crisis was at its peak. While most observers were filled with pride in light of this tremendous achievement, some critics raised questions on the building's viability, given its enormous cost of around $1.5 billion (Dh5.5 billion).
In fact, calculating the return on investment of such a building can be tricky — it does not simply follow the plain metrics of the property market, which, by the way, has been favourable so far.
The Burj Khalifa's occupation rate is now above 80 per cent nearly five years after its inauguration, and the tower saw the costliest property deal in Dubai in the third quarter.
A unique project reflecting Dubai's ingenuity, technological innovation and can-do mentality, the Burj Khalifa has become a symbol for the emirate and is attracting millions of tourists and visitors. It also underlines the aspiration of Dubai and the UAE to be the Middle East's economic heartbeat.
A lot of value generated from this property cannot be measured by financial statements alone, as it has a very broad and intrinsic socioeconomic impact.
''The Burj Khalifa has helped create a brand for Dubai,'' says Stephen Mezias, Professor at business school Insead's Abu Dhabi campus, adding that with ''such powerful visual images, Dubai promotes its geographical position at the corner of three continents and its stability to attract investors.''
The renewed strength in Dubai's property market has inspired developers and architects to build tall structures, of which the Marina 101 tower is one of the most remarkable. When it opens next year, the tower will be the tallest residential building in the world and the second tallest in Dubai at 427m.
Marina 101 is being built by one of Turkey's largest construction groups, TAV Construction, which has emerged as one of the most successful Turkish companies in the UAE.
''The Marina 101 carries high importance for TAV Construction as it reflects the company's achievements in the field of intelligent buildings and has contributed to its prestigious position in the Gulf,'' says TAV Construction's Middle East Director, Yusuf Akcayoglu.
In another major project, Burj Khalifa's developer Emaar Properties revealed in October plans to construct the world's tallest twin towers, which will serve as the centrepiece of a new district called Dubai Creek Harbour. While no details on the height of the torpedo-shaped towers were released, the project is expected to surpass the world's current tallest twin towers, the 452m Petronas Towers in Kuala Lumpur, Malaysia.
Does building taller towers make economic sense? Yes. Emaar recorded a net operating profit of $678 million during the first nine months of the year, driven by robust financial fundamentals, surging investor confidence and Dubai's strong economic growth.
''The prime driver in our growth is the positive performance of the Dubai economy, which continues to inspire international investor confidence,'' Emaar's Chairman Mohammad Alabbar noted in the earnings release issued on October 29.
''Our strategy for the future is to further consolidate Emaar's position as one of the largest developers of iconic projects and to increase our recurring and international revenues and profits.''
UK-founded Aedas, one of the five largest international architectural firms, has also contributed to the UAE skyline with a number of amazing buildings and tall structures, most notably Ocean Heights, a supertall 310m residential skyscraper in Dubai Marina, and the 250m U-Bora Office Tower in Business Bay.
Aedas designer Andrew Bromberg is also the mastermind behind the Pentominium Tower in Dubai Marina, which is currently on hold but would surpass the Marina 101 as the world's tallest residential building at 510m when completed.
Michael Fowler, Aedas' Managing Director for the Middle East, believes in the economic viability of such tall structures.
''Tall buildings provide more usable floor area per unit of external surface and deliver efficiencies in the use of materials and energy,'' says Fowler. ''And as population grows and the need for urbanisation and densification increases, tall buildings can accommodate more people and offer opportunities to cluster multiple complementary and symbiotic uses.''
He also says Dubai is destined for such sky-high property endeavours.
''Dubai has long established itself as an innovative crossroads of the world where developers and architects are encouraged to push the design limits,'' he says. ''Creativity is unleashed here, and tall and supertall towers are the results of such creativity and are part of what draws people to Dubai.
''The people in Dubai also welcome growth and development and they see tall and big developments as good projects. In addition, the large expatriate population brings Dubai the world view of innovative architecture.''
Another UK-based firm, Atkins, is responsible for some of the most iconic structures in Dubai such as the Burj Al Arab, Jumeirah Beach Hotel and The Address Downtown Dubai.
Atkins also designed much taller buildings, including Sama Tower on Shaikh Zayed Road, Almas Tower, the tallest building in Jumeirah Lakes Towers, and the residential towers of Al Habtoor City, which will rise more than 300m in Business Bay. One of Atkins' latest designs is the Suites in the Skai hotel in Jumeirah Village.
''Tall buildings have become an important part of Dubai's identity,'' says Steve Harrison, Design Director for Structural Engineering at Atkins. ''They've helped put it on the world map. Dubai is a fantastic success story for tall buildings going back to the World Trade Centre, the Emirates Towers and, of course, the Atkins-designed Burj Al Arab.''
He lauds the emirate's open-minded approach in encouraging construction of tall buildings. ''Dubai's focus on tall buildings has led to it becoming a centre of excellence in the skills and knowledge needed to design and construct them,'' says Harrison. ''This concentration of skills has certainly contributed to Dubai's ability to keep building ever higher, and also to export its expertise elsewhere in the world.''
In terms of economic viability, Harrison notes it is essential for tall and supertall developments to be embedded in a community with appropriate infrastructure.
''The basic tangible benefit is related to high-density development,'' he says. ''If you build high, particularly in an area where space is constricted, you will be able to get more people into the same plot of land. Once you go from tall to supertall, the complexities of design and construction become greater and the relative cost of development becomes higher. Economically, it can still make sense because you're going to have more units to occupy, with a larger community needing local goods and services.''
Harrison adds: ''A building such as the Burj Khalifa wouldn't be anywhere near so economically viable if it were a stand-alone development. Of course, it is so much more than that. It draws people to Dubai and directly to Downtown Dubai. Even smaller developments can benefit from this effect.''
However, here's a question everyone has been asking: How tall can they get?
Technical progress in the past has constantly pushed the boundaries of vertical construction. Precision engineering now allows structures almost three times the height of the Chrysler Building in New York.
Constructed in the 1930s, the building was the first to cross 300m. It is made of brick around a steel skeleton, as opposed to the concrete and steel rebar structure of the 828m Burj Khalifa.
Far from the limit
Architects at Chicago based Skidmore, Owings and Merrill, which designed the Burj Khalifa and the recently inaugurated 541m One World Trade Centre in New York, believe buildings could still go much higher, especially when a supertall tower is based on Y-shaped foundations to give it perfect stability, similar to the one used for the Burj Khalifa.
The 1km Kingdom Tower in Jeddah, Saudi Arabia, has still not reached the technical limits. In theory, a supertall tower could reach more than 4km, as shown by the XSeed 4000, a building design by Japanese developer Taisei Corporation in the 1990s.
The 800-storey hyperbuilding is highly likely never going to be built, mainly because of its projected cost of around $1 trillion and the fact that it would have to use a 6km ground base. There are also problems in plumbing, maintenance, elevator transport, energy supply and earthquake protection.
For these same reasons, other futuristic mega-tower concepts have also never materialised, such as the Ultima Tower (3,218m) by US architect Eugene Tsui, Dubai City Tower (2,400m), Shimizu Mega-City Pyramid (2,004m) envisaged for Tokyo, Millennium Challenge Tower (1,852m) proposed for Kuwait City and the Bionic Tower (1,228m) designed for Hong Kong or Shanghai.
There are, however, other more realistic developments in the pipeline, apart from Jeddah's Kingdom Tower, that could surpass 1km such as the Azerbaijan Tower in Baku, Murjan Tower in Bahrain and Mubarak Al Kabir Tower in Kuwait. Even Sao Paulo in Brazil has plans to construct the 1,111m Orbita Residence, a supertall tower that planners say could be realised by 2026.
However, the feasibility of such buildings depends largely on economic factors. ''The limit for building tall is an issue that design professionals have been studying for years,'' says Fowler.
''There is surely a technical limit to building tall, as taller buildings require more lifts, making the ratio of lift core to floor plate an issue. Bracing against wind loads also becomes more and more challenging.
''But with innovation and technological advances it is possible to build taller and taller buildings.
''The more complex issue is economic factors. Super tall towers require super big capital budgets. At some point it may not be commercially viable with such large amount of capital investment,'' he adds.
Harrison sums it up this way: ''At a certain height it actually becomes a question of economics and return on investment, as much as what is technically possible.
''Structures beyond 1km are achievable, the issue is more a question of how much floor space is financially attractive in a single building from an investment perspective and what, if any, compromises on ease of living would have to be accepted by occupants.''
Read about Dubai Marina tower launch which got an instant response
Source: Arno Maierbrugger, Special to Property Weekly