GLOBAL CITIES SKYSCRAPERS 2015 REPORT GLOBAL SKYSCRAPERS CITIES 2015 REPORT 03 TABLE OF LOOK SKYWARDS The world’s cities are in the midst of a skyscraper building boom and this report addresses the question, INTRODUCTION CONTENTS why do we need these giant buildings? INTRODUCTION BY — JOHNINTRODUCTION SNOW BY — JAMES D. KUHN Head of Commercial, President, Knight Frank Newmark Grubb Knight Frank Our analysis shows that skyscrapers are cut, which benefits social and are the optimum means of family lives. When offices and THE WORLD’S TALLEST addressing major economic and homes are lifted above street level, geographic challenges facing cities the ground floors and basements BUILDING TIMELINE today. These are: of buildings are freed up for shops and leisure facilities. The spaces » In order to accommodate between tower clusters can be economic and population growth developed as parks and public a city can either move outwards or areas; while skylines are enlivened upwards. Moving outwards breaks 2019 with iconic architecture. Kingdom Tower, up business clusters, and creates Jeddah political problems, like allowing » Global real estate capital markets 2010 Burj Khalifa, development on green fields around are seeing more activity from those Dubai cities. This moves the pendulum who wish to deploy money in very of debate in favour of building large sums (above the $1 billion 2003 Taipei 101, 4-11 12-14 upwards to provide more homes mark). The size of skyscrapers makes Taipei and business space. them attractive to such investors, 1998 TOWERING ABOVE SKYSCRAPER and this will encourage a movement Petronas Towers, » For companies today, staff Kuala Lumpur THE REST INDEX towards developing in scale. retention is high up the agenda. Firms are increasingly focused on keeping Our league table ranking the world’s Losing star fee-earners is damaging Recent enthusiasm for skyscrapers 1974 their staff happy, and the skyscraper delivers leading cities as high rise centres The Sears Tower, an office people want to work in. of commerce and living. for business, and even the cost reflects a shift in the global Chicago of replacing support staff can be economy towards city centres, as 1972 higher than the rent paid on their automation in factories means that World Trade Center, workstations. Skyscrapers are one more humans do knowledge jobs in New York of several means firms have found offices. Today’s knowledge workers 1931 to make the office an exciting place increasingly want to live near The Empire State Building, New York to be. Also, an inspirational office work, while firms want staff to feel can encourage staff to interact and inspired by their workplace. The 1930/31 The Chrysler Building, share knowledge, thus driving skyscraper is successfully delivering New York 15 16-17 18-19 up productivity. the volume and type of homes and 1930 WEST SIDE FIVE FUTURE A B O U T offices our cities require. Bank of Manhattan » As well as creating a better Trust Building, STORY TRENDS THE GROUP working environment, skyscrapers We hope you find this report New York Manhattan’s Far West Side is experiencing What are the global trends that are sending can make the city a better place informative, and if you wish to 1913 a transformation with a new skyscraper city skylines across the world ever higher? to live. If more homes can be built discuss any of the issues raised, The Woolworth Building, New York district under construction. near to work, commuting times please do not hesitate to contact us. 2 GLOBAL SKYSCRAPERS CITIES 2015 REPORT For a worker earning over £35,000 for staff who wish to jog or cycle to SKYSCRAPER (UPPER FLOORS) RENTAL GROWTH p.a. in London’s The City financial work are becoming common, as is SIX MONTHS TO END OF 2014 district, should they leave, the fee replacing car parking spaces with 04-05 Source: Knight Frank Research, Dubai: The city has added Newmark Grubb Knight Frank Research paid to a recruitment consultant bike racks. A gym in the building, almost 190 skyscrapers to replace them is greater than and eating establishments are also REST since 2000 the annual rent on their office now increasingly valued by tenants. 20.0% 13.2% 11.3% 10.6% 7.7% 6.1% 2.9% 2.1% 1.5% 0.8% 0.0% -1.2% work station; and that head-hunter Extensive basement areas and retail charge is just a small part of the concourses that are typical among overall staff turnover cost. This skyscrapers can help on these issues. means that even for staff in support roles the expense of replacement overshadows property costs, and MOVING TO A NEW TOWER TOWERING ABOVE THE this is before considering the effect CAN OFFER A SENSE OF A an enhanced working environment NEW BEGINNING THAT WILL TOWERIN can have on productivity. ENCOURAGE STAFF TO EMBRACE As a consequence firms when THE CHANGES. approaching property now strive for: To this backdrop, skyscrapers are ABOVE THE REST 1 The office as the place to be: flourishing. They are seen as a way Firms aim to create offices to give staff a workplace that feels From New York to Shanghai, companies want that staff want to spend time special, and promotes esprit-de- exciting new work places to inspire staff, while more in. This is partly achieved by corps – an office you want to tell people want to live near work. The skyscraper is innovative fit-out, ranging people about at a dinner party. from games rooms, to buffets seen as the best way to achieve these goals. and cafés, to private work EVERYONE GETS LIGHT areas. Being in a skyscraper is Insurance firm, Markel, has WRITTEN BY — JAMES ROBERTS another way to give the office Chief Economist, Knight Frank recently moved their London office New York (Midtown) York New Frankfurt Hong Kong Angeles Los (City) London Singapore Shanghai San Francicso Taipei Sydney Dubai Beijing wow factor in the eyes of staff. into 20 Fenchurch Street, a Rafael Skyscrapers are a rising tide in were out-of-town and low rise, 2 Viñoly designed tower. Andy Davies, the modern global city. London and thus cheaper, were growing The office as a catalyst of the COO and CFO, sees being in a has added 23 new skyscrapers in popularity with companies. integration: This is where firms skyscraper as a way of improving (a building over 350 feet high) Skyscrapers like the city centres use the office to bring about the workplace experience. since the turn of the millennium, they occupied were viewed as changes in working habits, so compared to 17 in the preceding expensive and in decline. people mix and interact to create Markel found a tower floor plate has forty years. While New York a greater sense of community. an advantage over a conventional However, firms today increasingly added four new towers in 2014 Staff are encouraged to leave building as there are no desks view real estate as a means of alone, including the iconic One desks and move around the remote from a window. According controlling a much bigger cost, World Trade Center. This sounds office and speak face-to-face. to Davies: “Wherever you go in the namely staff retention. This has impressive until one considers Moving to a new tower can new office, everyone gets natural coincided with a movement of that Dubai has built nearly 190 offer a sense of a new beginning light, even at their desk; and the people back into cities, reversing skyscrapers since 2000, and that will encourage staff to views are spectacular.” the preceding exodus to the suburbs Shanghai over 90. embrace change. – New York City’s population has Markel installed internal staircases 3 The new enthusiasm for increased by 19% since 1980. The office which is close that pass through the floors to Chicago’s Hancock Tower, to home: This final point in skyscrapers is partly one of city a true multi-use skyscraper, encourage staff to circulate in the status. Less mentioned are recent SKYSCRAPERS: IT’S ALL ABOUT PEOPLE has the world’s third particular has brought offices office rather than remain tied to highest residence back into city centres from changes in how firms perceive For private sector services firms desks. This increased the incidence out-of-town locations, which offices, particularly in relation to (the mainstay of city office of chance encounters where makes skyscrapers important their workers. occupation) salaries typically knowledge can be shared. Again, to re-introduce more business the open environment and natural In the past, offices were typically account for around half of space into crowded CBDs. light facilitate this cultural change viewed as a cost that companies operating expenses. However, an – according to Davies, “in the new wanted to minimise, with little unquantifiable cost is the loss of Many firms now want to support office, you can’t hide”. thought given to how they could value when successful staff leave, the work/life balance, and try to 20 Fenchurch Street, fit the office around lifestyles. For boost productivity. Consequently, and the additional expense of one of London’s new in the 1970s and 1980s, offices that replacing them. wave of towers instance, locker-rooms and showers CONTINUED ON 06-07 A GLOBAL SKYSCRAPERS Manhattan is seeing two new CITIES 2015 REPORT tower clusters developed overtake The Shanghai Tower in REINVENTING THE CITY SKYSCRAPER PRIME YIELD SPREAD OVER B height in 2016. Its design includes 06-07 10 YEAR BONDS (BASIS POINTS) a three storey ‘retail bridge’ that Barangaroo, much like London’s Source: Knight Frank Research, will connect the tower to future Canary Wharf, is an example of Newmark Grubb Knight Frank Research, Thomson Reuters REST neighbouring developments.