Why skyscrapers are good for the economy



Skyscrapers are very tall buildings that define a city’s skyline. The term originates in the US in the late 1880s during the building boom in Chicago and New York. At this time, buildings that had more floors than the surrounding buildings were called skyscrapers. Lately, buildings that have at least 40 or more floors are designated as skyscrapers. The Council on Tall Buildings and Urban Habitat, an international organization of civil engineers and architects based in Chicago, ranks the heights of buildings based on three criteria: the height of building from the lowest level to the architectural top, excluding antennae and flagpoles; the highest occupied floor; and from the lowest level to the highest level, including antennae and flagpoles.

Skyscrapers were originally created in the USA as a symbol of economic strength and increasing global business operations. Unsurprisingly, most of the tallest buildings in the world were located in the US. However, the popularity of tall buildings has recently decreased in the US among American investors due to a low performing real estate market, scepticism of the buildings profitability and the catastrophic 9/11 terror attack and its after-effects. In developing countries though, tall buildings are still attractive as they offer an impressive way to “announce themselves” in the global business world.

The World’s Tallest Skyscrapers

The Burj Khalifa (Khalifa Tower), in Dubai, United Arab Emirates, opened in January 4, 2010, is the tallest building in the world at 2,723 feet.  The Khalifa Tower is named after Khalifa bin Zayed al-Nahyan, President of the UAE. The tower, comprising a mixed-use community, including 30,000 residences, nine hotels, seven acres of parkland, 19 residential towers, a shopping mall, and a 30-acre man-made lake, is part of a national effort by Dubai to support a strong tourist economy.  It is a major plank of the long-standing initiative of the government of the UAE to transform the economy from oil-based to more service-oriented and tourism-based.

The world’s second tallest building, The Shanghai Tower, Shanghai, China was completed in March 2014 after eight years of construction and opened in 2015. It cost $4.2 billion, is 2,073 feet tall, and has 121 floors. The third tallest building, the Makkah Royal Clock Tower Hotel, Mecca, Saudi Arabia, also known as Abraj Al Bait, is a government-owned building complex in Mecca, Saudi Arabia. The Royal Clock Tower includes residential apartments for permanent residents, hotel rooms for visitors, a conference center, a large prayer room capable of holding more than 10,000 people, a five-story shopping mall, an Islamic Museum, and a Lunar Observation Center to see the moon during the Holy Months, and 21,000 white and green lights at the top of the clock that flash to signal the time for prayers five times a day visible from as far as 19 miles away. The world’s fourth tallest building is the One World Trade Center, New York City, USA, built as an emotional reaction to 9/11, and the centerpiece of the New York skyline. The CTF Finance Centre in Guangzhou, China, is the world’s fifth tallest building, completed in 2016. The mixed-use urban complex has four major transition points at which its function changes from offices to apartments to hotel rooms. This is followed by Taipei 101 (1,667 feet), Taipei, Taiwan, the sixth tallest in the world. The building has been awarded by Leadership in Energy and Environmental Design (LEED) as the tallest and largest green building in the world. The Shanghai World Financial Center, Shanghai, China (1,614 feet, 101 floors), International Commerce Centre, Hong Kong (1,587 feet 118, stories of hotel rooms, commercial offices, shopping malls, five-star restaurants, and an observatory, Sky100) and Petronas Towers 1 and 2, Kuala Lumpur, Malaysia, complete the list of the world’s top ten tallest buildings.

Importance of Skyscrapers to Developing Countries

Malaysia’s rapid economic and social development caused its poverty level to decrease from 49% in 1974 to 6% in 2004. It was able to do that through the power of human capital, which resulted in an increase in manufacturing and lower commodity prices. Thus it transformed itself from being a poor country to being an industrial powerhouse symbolized by the Petronas Towers. For Dubai as well, its rapid development has been mediated by, among others, diversification strategies and its ability to maintain its status as an international tourist destination. The Burj Khalifa in Dubai was an anchor project and part of a master plan to drive investment that greatly benefited the economy.

Research findings indicate that that skyscraper development helps kick-start stock markets. Construction starts of record-breaking skyscrapers triggers subsequent stock returns as it indicates over-confidence. In addition, the financing architecture of skyscraper development projects is very crucial to managing risks and maximizing returns. Other attendant benefits include employment creation, tourist attraction including through conference tourism, skills and technology development as local professionals interact with the world’s best during such projects, and tax benefits to the local economy, among others. Skyscrapers may also contribute significantly to the comparative advantage of the host nation, especially in the service sectors. Studies from Bahrain, United Arab Emirate and Kuwait indicate that the design of the skyscraper itself can contribute positively to the environment, partly by lowering the pressure on the natural resources and providing habitants with an enjoyable living environment.

Skyscrapers of Africa

Fast-growing Africa presents a wide range of investment opportunities from agriculture, infrastructure, minerals, industry and even manpower, which has seen it attract whopping investments in real estate and other infrastructure. What better way to signal this vision and reality than with iconic superstructures?

The Carlton Center in South Africa has for long held the pole position as Africa’s tallest building despite not being featured even amongst the top 100 skyscrapers in the world. Currently, South Africa hosts five of the top ten tallest buildings in Africa: Ponte City Apartments (173m), Marble Towers (152m), Pearl Dawn (152m) and The South African Reserve Bank (150m). Morocco has the 210m Minaret Hassan II Mosque in Casablanca and Algeria’s 173m Bahia Centre.

The Pinnacle

In 2017, Kenya entered the top 10 with the completion of the 31-storey Britam office tower that stands 200m tall and carries the distinction of being the second-tallest building in Africa. Now, with The Pinnacle, Kenya is set to gain the distinction of hosting the tallest building in Africa.  Already, construction started in May in Nairobi’s Upperhill business hub. The building will bear testimony to the rise of Nairobi as a regional economic and business centre. The building, upon completion, is set to rise 300m into the Nairobi skyline, host 150 posh apartments and come topped off with a helipad that will allow patrons to fly directly to the Hilton Hotel and beat the chaotic Nairobi traffic. The building is being constructed by Hass Petroleum and White Lotus – Dubai-based investors who have injected a whooping $220m (Sh22 billion) into the 70-floor highrise, which will feature a 45-storey Hilton Hotel, a 5-Star Restaurant on the 42nd floor, a luxury spa & gym including an open-air infinity pool. It shall also house 42 floors of high-end residential apartments, 20 Grade-A offices and 5 floors of shopping space among other luxuriant facilities. The Pinnacle of Africa will be completed by the end of 2019. 

The Writer is CEO Lens Media, a Public Relations agency based in Nairobi.