SKYSCRAPERS GLOBAL CITIES 2015 REPORT - Knight Frank
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GLOBAL CITIES SKYSCRAPERS 2015 REPORT
GLOBAL SKYSCRAPERS
CITIES 2015 REPORT
TABLE OF LOOK SKYWARDS
03
INTRODUCTION
CONTENTS
The world’s cities are in the midst of a skyscraper
building boom and this report addresses the question,
why do we need these giant buildings?
INTRODUCTION BY — JOHN
INTRODUCTION
SNOWBY — 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
addressing major economic and
family lives. When offices and
homes are lifted above street level,
THE WORLD’S TALLEST
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
upwards. Moving outwards breaks
areas; while skylines are enlivened 2019
with iconic architecture. Kingdom Tower,
up business clusters, and creates
political problems, like allowing »» Global real estate capital markets
Jeddah
2010
Burj Khalifa,
development on green fields around are seeing more activity from those Dubai
12-14
cities. This moves the pendulum who wish to deploy money in very
4-11
T OW ER ING A BOV E SK YSCR A PER
of debate in favour of building
upwards to provide more homes
and business space.
large sums (above the $1 billion
mark). The size of skyscrapers makes
them attractive to such investors,
2003
Taipei 101,
Taipei
1998
and this will encourage a movement Petronas Towers,
THE REST INDEX »» For companies today, staff Kuala Lumpur
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 1 9 74
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,
New York
workstations. Skyscrapers are one more humans do knowledge jobs in
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
15 16-17 18-19 can encourage staff to interact and inspired by their workplace. The 1 9 3 0/ 3 1
The Chrysler Building,
share knowledge, thus driving skyscraper is successfully delivering New York
up productivity. the volume and type of homes and 1930
W EST SIDE FIVE FUTURE A BOUT »» As well as creating a better
offices our cities require. Bank of Manhattan
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
TOWERIN
For a worker earning over £35,000 for staff who wish to jog or cycle to
SKYSCRAPER (UPPER FLOORS) RENTAL GROWTH
04-05
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
TOWERING ABOVE THE REST
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
20.0%
since 2000
10.6%
13.2%
0.0%
0.8%
11.3%
-1.2%
2.9%
1.5%
6.1%
2.1%
7.7%
the annual rent on their office now increasingly valued by tenants.
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
this is before considering the effect CAN OFFER A SENSE OF A
an enhanced working environment NEW BEGINNING THAT WILL
ABOVE THE REST
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
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
innovative fit-out, ranging
people want to live near work. The skyscraper is from games rooms, to buffets
people about at a dinner party.
seen as the best way to achieve these goals.
New York (Midtown)
and cafés, to private work EVERYONE GETS LIGHT
San Francicso
London (City)
Los Angeles
areas. Being in a skyscraper is
Hong Kong
Singapore
Shanghai
Frankfurt
WRITTEN BY — J AMES ROBERTS Insurance firm, Markel, has
Sydney
Beijing
Taipei
Dubai
another way to give the office
Chief Economist, Knight Frank recently moved their London office
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
The office as a catalyst of Viñoly designed tower. Andy Davies,
the modern global city. London and thus cheaper, were growing
integration: This is where firms the COO and CFO, sees being in a
has added 23 new skyscrapers in popularity with companies.
use the office to bring about skyscraper as a way of improving
(a building over 350 feet high) Skyscrapers like the city centres
changes in working habits, so the workplace experience.
since the turn of the millennium, they occupied were viewed as
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 Staff are encouraged to leave
added four new towers in 2014 building as there are no desks
view real estate as a means of desks and move around the
alone, including the iconic One remote from a window. According
controlling a much bigger cost, office and speak face-to-face.
World Trade Center. This sounds to Davies: “Wherever you go in the
namely staff retention. This has Moving to a new tower can
impressive until one considers new office, everyone gets natural
coincided with a movement of offer a sense of a new beginning
that Dubai has built nearly 190 light, even at their desk; and the
people back into cities, reversing that will encourage staff to
skyscrapers since 2000, and views are spectacular.”
the preceding exodus to the suburbs embrace change.
Shanghai over 90.
– New York City’s population has Markel installed internal staircases
3
The new enthusiasm for increased by 19% since 1980. he office which is close
T that pass through the floors to
Chicago’s Willis Tower
skyscrapers is partly one of city to home: This final point in encourage staff to circulate in the
(formerly Sears Tower) was
status. Less mentioned are recent SKYSCRAPERS: IT’S ALL ABOUT PEOPLE the world’s tallest building particular has brought offices office rather than remain tied to
changes in how firms perceive from 1974 to 1998 back into city centres from desks. This increased the incidence
For private sector services firms
offices, particularly in relation to out-of-town locations, which of chance encounters where
(the mainstay of city office
their workers. makes skyscrapers important knowledge can be shared. Again,
occupation) salaries typically
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
unquantifiable cost is the loss of Many firms now want to support – according to Davies, “in the new
wanted to minimise, with little
value when successful staff leave, the work/life balance, and try to office, you can’t hide”.
thought given to how they could
20 Fenchurch Street,
boost productivity. Consequently, and the additional expense of fit the office around lifestyles. For
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
06-07
B height in 2016. Its design includes
10 YEAR BONDS (BASIS POINTS) a three storey ‘retail bridge’ that Barangaroo, much like London’s
TOWERING ABOVE THE REST
Source: Knight Frank Research, will connect the tower to future Canary Wharf, is an example of
Newmark Grubb Knight Frank Research, Thomson Reuters
neighbouring developments. former-industrial land in a dense city
Guangzhou has constructed a centre being wholesale redeveloped
CONTINUED FROM 04-05
SHANGHAI’S SUPER TOWER purpose built CBD, the Zhujiang to match economic changes.
C New Town, which incorporates
ICONIC IS NOT ENOUGH The Shanghai Tower, which Where there is a large swathe
skyscrapers like the Guangzhou
Martin Jepson, President & COO for is now the tallest building in of industrial land, regenerating
Twin Towers (the second of which
Brookfield’s UK division, believes China, is part of this movement piecemeal is often not an option. A
completes next year).
that the best means of achieving towards skyscrapers that allow small office building constructed in
the staff-friendly skyscraper is staff to interact, according to the Other Asian towers completing the midst of redundant warehouses
via a very efficient floor plate. building’s Marketing Director, this year include Jakarta’s will struggle to sign a tenant, and the
“Building iconic for the sake of it is Wendy Yu. “The office floors Cemindo Tower (which will be the local transport authority is unlikely to
D add it to their routes. Redevelopment
not sustainable. Offering efficiency connect with the 21 sky lobbies tallest building in Indonesia), and
of floor occupation and flexibility and courtyard gardens, providing the IB Tower, and the Naza Tower has to be en-masse to get the buy-in
is what tenants are seeking first people with spaces to interact. in Kuala Lumpur (these will be from municipal authorities to add
and foremost.” This creates a blank Amenities like cafés, convenience the city’s third and fourth highest infrastructure, and with architecture
canvas on which the occupier can stores, ATMs, and entertainment E skyscrapers, respectively). of a quality that will draw big name
set out a bespoke office that matches facilities are also distributed tenants as anchor pre-lets; which in
Over the next two years, Sydney turn persuades other firms to move
their business practices. throughout the The Shanghai
will add to its skyline the to the new district.
Tower.” A super-tall building
triple skyscraper International
of 6.2 million sq ft, the sense Skyscrapers have the gravitas
F Towers cluster at Barangaroo, a
BUILDING ICONIC FOR THE SAKE of community is facilitated by and quality of offices that attract
major dockside redevelopment.
breaking the tower into several Fortune 500-type firms, which
OF IT IS NOT SUSTAINABLE. Anchor tenants include HSBC,
vertical communities, each with its gives the confidence to other
KPMG, PwC and Westpac. The
own atrium. G potential stakeholders (such as the
complex will include more than
Another important factor, according Shanghai’s skyscraper cluster is local government, retail and leisure
800 apartments, a hotel, and
to Jepson, is offering an entrance to found in the Lujiazui CBD, part of tenants, and investors) to back a
shops, while Renzo Piano has
the building that suits the tenant’s the city’s Pudong district whose H major regeneration scheme. That a
been commissioned to design
needs. “At 100 Bishopsgate we have J growing number of large companies
futuristic skyline has become three new residential towers at
the luxury of almost 17,000 sq ft I are willing to be that pre-let anchor
symbolic of China’s economic Barangaroo South.
of reception at ground level, so we tenant, even if it means moving to
success. In 1993, Pudong was
can offer some tenants their own another part of the city, is behind a
largely warehouses and farmland.
identity. We don’t scrimp on the A B new wave construction around the
By 2000 the population had
ground floor space”. This brings out PARIS FRANKFURT world. New York City has several
mushroomed to over 3 million,
examples of this.
the importance of an appropriate
public realm for skyscrapers, where
before rising above 5 million 492 421
at the time of the 2010 census.
C D
NYC’S NEW TOWER CLUSTERS
impressions are often shaped before Around 40% of people living
the front door is even reached. CHICAGO SYDNEY New York is benefiting from the
there originate from elsewhere
arrival of two new skyscraper
Particularly in London’s EC3 in China. This makes Pudong 381 265 clusters, found in Downtown and
insurance district, utilising towers a case study in the urgent need
E F western Midtown.
to raise a firm’s profile has played for emerging market cities to
LONDON SHANGHAI In Downtown, there is the new
a role in generating office demand. go skywards to cope with rapid
Swiss Re famously chose The economic change. 246 245 World Trade Center complex,
where 5.3 m sq ft of office space
Gherkin (aka 30 St Mary Axe) in
order to leverage the publicity TOWERING AMBITIONS G H has already completed, with a
HONG KONG NEW YORK
value of being in such an iconic Inevitably other cities have
building. This set in motion a
domino effect of innovative towers
ambitions to replace the Pudong 190 181 CONTINUED ON 08-10
towers as the Chinese skyline
in EC3 signing up insurance photo that appears in foreign I J The Shanghai Tower is currently
SAN FRANCISCO SINGAPORE China’s tallest building
tenants, such as The Leadenhall newspapers. In Shenzen, the Ping
Hong Kong has the
Building, with its tapering design, An International Financial Centre
drawing US giant, Aon. is under construction and is set to
181 114 highest skyscraper office
rents in the world
GLOBAL SKYSCRAPERS
CITIES 2015 REPORT
CONTINUED FROM 06-07 a tenant in London’s The Shard, La Défense in Paris
Burj Khalifa will pass the
08-10
The Shard, London combines offices, homes,
further 5.3 m sq ft to follow. This further demonstrating the media/ Bridge Quarter title of the world’s tallest
hotels, shopping and
is complemented by 565,000 sq ft creative interest in towers. culture in an iconic building to Kingdom Tower
TOWERING ABOVE THE REST
skyscraper district. in Jeddah in 2019
of retail at Brookfield Place, and
MIXED-USE MOVING UP THE AGENDA
Westfield’s World Trade Retail.
Increasingly, mixed-use is moving
The new office stock is coinciding With a population of
up the tower agenda – indeed
with a transformation of the 15 million, Shenzen is
the majority of skyscrapers in
Downtown market, with more embracing tall buildings
both Manhattan and London’s
technology and creative firms
future development pipeline are
moving in. Conde Nast, the publisher
residential. For instance, in London
of Vogue, is the anchor tenant for
a residential tower cluster is being
One World Trade Center. Other
developed at Nine Elms, thanks to
firms signed up include ad agency
a new underground rail line which
KiDS Creative, and tech companies
will terminate at the mixed-use
High 5 Games, Tinypass, and xAd,
redevelopment of the Battersea
demonstrating the changing tenant
Power Station site.
profile of a district once associated
with finance.
Turning to Midtown, near Penn BEYOND THE LOCAL POPULATION
Station we are seeing a new cluster AND WORKFORCE, AN ESTIMATED
of skyscrapers being developed. SIX MILLION PEOPLE EACH YEAR growth. This includes delivering
This includes the 28 acre Hudson perception than reality, as it tends
VISIT LA DÉFENSE. to be the upper floors, above
more homes and additional
Yards district, which is being business space. Particularly, in
developed by Oxford Properties the skyline that command the
emerging markets this has led to a
and Related Companies. This premium office rents – the lower
La Défense in Paris shows how drive to build towers that are ever
consists of four commercial towers floors tend to let on standard prime
skyscrapers when set in a well- bigger. However, this could change
and two residential towers. It is rents. The premium for views can
designed public realm can create a as these cities reach maturity.
complimented by Brookfield’s vary from 15-20% in the City of
destination in its own right. Beyond
neighbouring Manhattan West London and Hong Kong island, to In western cities when skyscrapers
the local population and workforce,
project of 5.8 m sq ft, which includes nearly double average prime rents are developed it is common
an estimated six million people long-term obligations, the longevity
in Midtown Manhattan. As an island city, practice to pre-let a large share
two skyscrapers of 67 storeys each. each year visit La Défense for non- skyscrapers have proved of skyscrapers is also an attraction.
of the commercial space either
business reasons. A survey of visitors ideal for accommodating In New York, art deco towers from
As with the new World Trade NEW WAVE OF INVESTORS Singapore’s rapid before construction starts, or early
by the local tourist board found the 1930s still operate as modern
Center, the tenants already signed economic growth on in the development process.
that half of all non-business visitors Skyscrapers are not just popular office buildings. The prospect of a
up for Hudson Yards are not from This is because towers in the
were there to shop, and a third were with tenants, as they are also in building that gains almost timeless
the financial and professional west, which are unlikely to be
tourists from outside Paris. vogue with real estate investors. appeal is of interest to an investor
industries who previously backed by government money, are
This is the result of more mega- who must think very long-term.
dominated Manhattan skyscrapers. La Défense is a successful example shaped principally by commercial
Future occupiers will include, funds targeting property in recent
of mixing living with work, with its As well as the mega funds decisions. This has been less of
CNN, L’Oreal, Time Warner, and years, sometimes sovereign wealth
25,000 local residents . The proposed mentioned above, we are even a factor in emerging markets
Coach (a luxury goods firm). funds, but also national pension however skyscrapers allow sums increasing interest in real estate as an
Foster and Partners designed seeing interest in skyscrapers cities, where governments have
schemes and global private equity over the billion dollar mark to be alternative to bonds and equities.
This transition of skyscrapers Hermitage Plaza is characteristic of from private investors; as shown often wanted to encourage large
funds. Recent examples include invested in a single deal.
away from finance and towards this mixed-use approach. The 3.4 m Another attraction of skyscrapers by Brazil’s Safra family buying 30 amounts of modern business space
Blackstone purchasing 1740
creative industry occupiers is sq ft project (including twin towers Changes in global capital markets are relates to the diversity of the St Mary Axe. This could suggest a to be developed to accelerate the
Broadway and the Park Avenue
seen elsewhere in the world. In of 85 and 86 floors) will incorporate shaping the new trend, as the mega- tenancy schedule found in new club of skyscraper investors is modernisation of their cities.
Tower in New York for a combined many towers. Multiple tenants
San Francisco towers are under offices, luxury homes, a five star funds have traditionally been major emerging where the status factors
$1.1 bn, while in London the Qatari With economic maturity we could
construction to house technology hotel, conference centre, and high- investors in sovereign bonds. Years of with leases expiring at different found in leasing tower space are
Investment Authority recently see more cities in Asia choosing not
jobs moving into the city from low- end retail. Quantitative Easing (QE) have pushed times increases exposure to the similarly applied to owning one.
combined with Brookfield to buy to build very big towers in the future,
rise Silicon Valley. Cloud computing bond yields to record lows for some of rental cycle, creating plenty of
The resounding message from our but adopting the western model as
firm, Salesforce has pre-let a new
the majority shareholding in
the most popular triple A and double opportunity to asset manage a SKYSCRAPERS AND THE FUTURE
study of the global skyscrapers developer Canary Wharf Group. the need to modernise recedes. The
skyscraper as its headquarters in A sovereigns, making real estate tower to exploit changes in the
market is that they are associated The skyline of Pudong Turning to the future, skyscrapers drive for super tall buildings may
San Francisco, and in London they For funds which have very large yields comparatively attractive. QE leasing market. in Shanghai has
with exclusivity, whether it be for offer many opportunities for give way to a world where towers are
become symbolic of
also occupy space in The Heron commercial or residential use. This amounts of money to deploy sub- has also encouraged many funds to Particularly for pension funds, who crowded inner cities to address less concerned with height and more
China’s emergence as
Tower. Similarly, Al-Jazeera are can be more of a psychological $100 m deals can be too granular, diversify their investment portfolios, must match income streams with an economic giant problems of how to accommodate with the financial bottom line.
GLOBAL SKYSCRAPERS
GLOBAL SKYSCRAPERS
CITIES 2015
CITIES 2015REPORT
REPORT
IN 2009 THERE WERE
NINETEEN
SKYSCRAPERS IN
THE WORLD WITH
H E I G H T S O F OV E R
ONE THOUSAND FEET
SEVENTY
TODAY
THERE ARE
NINE
40%28%
O F W H I C H A R E I N C H I NA OF WHICH ARE IN THE UAE
Source:
Emporis, Knight Frank Research,
Newmark Grubb Knight Frank Research
Note: based on completed buildings
GLOBAL SKYSCRAPERS
CITIES 2015 REPORT
SKYSCRAPER
12-14
$150.00 $124.00 $108.75 $97.00 $94.25 $91.75 $90.00 $73.00 $68.75 $67.50 $65.00 $61.00 $58.25 $51.50 $43.50
SKYSCRAPER INDEX
$37.75 $33.25
INDEX Skyscraper Prime Office Rents
(USD/sq ft/yr)
$250.50
Hong Kong remains the world’s leading city for
skyscrapers, but New York is closing fast. While Asia
may be building apace, economic recovery in the US
is buoying demand for towers from investors and
tenants in the big North American cities.
Knight Frank’s latest skyscraper growth for tower space has buoyed
index has been expanded to take New York, where skyscrapers are
into account additional measures proving popular with the city’s fast
of a city’s significance as a centre of expanding digital and creative firms.
high rise business and living. The
It is probably no coincidence
index now assigns scores to each
that the cities ranked first and
city based on a range of indicators,
second have their CBDs on islands.
including skyscraper office rents
Skyscrapers are the ideal solution
and yields, the spread offered by
for space constrained CBDs,
investment yields compared to
particularly in an era when cities
national bonds, the number of high
are repopulating, as towers are able
rises built, and growth prospects
to maximise the potential space
for the city.
that can be delivered on a site.
The previous index had Hong HONG KONG NEW YORK TOKYO LONDON SAN FRANCISCO SINGAPORE SYDNEY MOSCOW LOS ANGELES SHANGHAI BEIJING CHICAGO PARIS FRANKFURT MUMBAI DUBAI KUALA LUMPUR SEOUL
Kong in the number one slot with
a huge lead. Interestingly, despite SCOR ES
widening the criteria assessed,
Skyscraper Prime Office Rents:
Hong Kong is still top of the table, Source: Knight Frank Research, Newmark Grubb Knight Frank Research, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
confirming that on a range of Sumitomo Mitsui Trust Research Institute
*Illustration not to scale
measures it is the world’s leading HONG KONG NEW YORK TOKYO LONDON SAN FRANCISCO LOS ANGELES SYDNEY CHICAGO SHANGHAI SINGAPORE FRANKFURT SEOUL PARIS BEIJING KUALA LUMPUR DUBAI MUMBAI MOSCOW
skyscraper city. However, the lead Skyscraper Index:
131.4 126.6 116.8 112.3 112.2 102.9 100.2 98.5 95.3 94 93.6 90.1 84.8 75.6 64.4 62.6 55.2 50.8
over the competition has narrowed. Source: Knight Frank Research, Newmark Grubb Knight Frank Research,
Sumitomo Mitsui Trust Research Institute, The IMF, Thomson Reuters,
In particular, stronger rental JP Morgan Chase
GLOBAL SKYSCRAPERS
CITIES 2015 REPORT
WEST SIDE STORY NEW YORK’S NEXT SKYSCRAPER CLUSTER
Images:
Hudson Yards
10 HUDSON YARDS 55 HUDSON YARDS 30 HUDSON YARDS
THE RELATED COMPANIES MITSUI FUDOSAN, THE RELATED COMPANIES THE RELATED COMPANIES
1,700,000 SQ FT 1,300,000 SQ FT 2,600,000 SQ FT
2015 2017 2018
UNDER CONSTRUCTION PLANNED PLANNED
52 STORIES 50 STORIES 84 STORIES
SIGNED: COACH, L’ORÉAL, SAP, DESIGNED FOR LAW FIRMS SIGNED: TIME WARNER
VAYNERMEDIA (HBO, CNN, & WARNER BROS.)
5 MANHATTAN WEST 450 WEST 33RD ST 3 HUDSON BOULEVARD 509 WEST 34TH ST
BROOKFIELD PROPERTIES THE MOINIAN GROUP TISHMAN SPEYER
1,800,000 SQ FT 1,800,000 SQ FT 2,850,000 SQ FT
2016 (RENOVATION) 2018-2019 2019
PLANNED UNDER CONSTRUCTION PLANNED
16 STORIES 66 STORIES 61 STORIES
SIGNED: CHASE DIGITAL MEDIA MIXED-USE DEVELOPMENT DEVELOPMENT PLANS
POSSIBLE ANNOUNCED JULY 2014
In Manhattan’s 50 HUDSON YARDS 1 & 2 MANHATTAN WEST
Far West Side an THE RELATED COMPANIES BROOKFIELD PROPERTIES
ambitious new 2,300,000 SQ FT 4,000,000 SQ FT
district is under 2020 TBD
construction, with PLANNED PLANNED
world famous 62 STORIES 67 STORIES EACH
companies signed PROJECT IN EARLY STAGES
OF PLANNING
SKADDEN, ARPS
SIGNED: AN LOI
as anchor tenants. Source:
Newmark Grubb Knight Frank Research
5
GLOBAL SKYSCRAPERS
CITIES 2015 REPORT
03
FUTURE
16-17
5 FUTURE TRENDS
TRENDS
When a city grows it can do so either laterally by
spreading out, or vertically by building skywards
03 BUSINESS CLUSTERS
The rise of the internet and electronic
trading was widely expected to break-up
business clusters, but in most instances this has
not been the case. Indeed the new wave of digital
companies has shown a strong propensity to cluster
in dense urban areas, whether it be SOMA in San
Francisco or Midtown South in New York, suggesting
thus converting air into ‘land’. Below we identify clusters could be set to grow in significance in a hi-tech
five trends that will encourage the Global Cities future. Going skywards helps to keep a cluster local. It is
to go upwards, making skyscrapers an essential noteworthy that the most enduring business cluster in
component of urban growth. London, the insurance firms in the EC3 post code, is
where we have seen a raft of new skyscrapers.
01 04 LIMITING SPRAWL
As cities grow they typically sprawl
01 NEW TECHNOLOGY
As buildings rise higher, new technologies
outwards, creating problems of extending
transport networks, building on green fields,
are emerging to make this both possible and and imposing longer commutes on staff. It can also
cost effective. With steel elevator cables, going create political and municipal funding problems if
much above 500 metres becomes problematic as cities struggle to ‘adopt’ the suburban towns around them
both weight and energy consumption increase. Finnish – a factor in Detroit’s recent bankruptcy. Skyscrapers
company, Kone, have developed a new carbon fibre cable reduce the need to sprawl. More concentrated, vertical
cities would allow transport networks to focus on
which can be as long as one kilometre while using less
energy to hoist elevators, as it is a fraction of the weight of 04 maximising local capacity and efficiency at peak times
steel. Thyssen-Krupp are looking into an elevator that has rather than extending lines further into the surrounding
no cable. It is based on magnet technology which would countryside. Reducing sprawl also increases eco-
eliminate the need for a counterweight, freeing up commuting like jogging or cycling to work.
internal space for other uses.
02 LIVING IN THE CITY 02 05 THE COMMUNITY CITY
While media attention often falls on the
Migration, gentrification, and growing skyline, the ordinary citizen encounters
economic opportunities have brought the city at ground level. Building offices and
about rapid population growth in cities across homes skywards frees up the ground floor
the globe. The UN is predicting the number of frontage, and indeed basements and first floors, for
mega cities (those with a population of over 10
million) to jump from 28 currently to 41 by 2030.
05 retail, leisure and other amenities. Once commercial
space is extending upwards not laterally, public areas
India’s urban population is forecast to nearly double to interspersed with art and sculptures can be created
814 million by 2050. For emerging markets cities, between tower concentrations. These can be used for
skyscrapers offer a means of delivering large swathes of markets and cultural events, to improve quality of life.
homes and business space in response to rapid With towers allowing more people to live in the centre,
economic and population growth. For western cities the CBD no longer becomes a ghost town outside of
towers offer a means of matching the popularity of office hours, encouraging a weekend and evening
living near work in densely developed inner cities. economy of shopping, culture and tourism.
GLOBAL SKYSCRAPERS
CITIES 2015 REPORT
ABOUT
18-19
ABOUT THE GROUP
C O N T AC T
THE GROUP
SKYSCRAPERS 2015 REPORT BY KNIGHT FRANK
AND NEWMARK GRUBB KNIGHT FRANK
JOHN SNOW, HEAD OF COMMERCIAL JONATHAN MAZUR,
KNIGHT FRANK MANAGING DIRECTOR OF RESEARCH
+44 20 7861 1190 NEWMARK GRUBB KNIGHT FRANK
JOHN.SNOW@KNIGHTFRANK.COM +1 212 372 2154
JMAZUR@NGKF.COM
JAMES D. KUHN, PRESIDENT
NEWMARK GRUBB KNIGHT FRANK NICHOLAS HOLT, HEAD OF RESEARCH
Knight Frank and Newmark Grubb Knight Frank, +1 212 372 2200
JKUHN@NGKF.COM
KNIGHT FRANK ASIA PACIFIC
+65 6429 3595
together, is a thoroughly integrated market-leading JAMES ROBERTS, CHIEF ECONOMIST
NICHOLAS.HOLT@ASIA.KNIGHTFRANK.COM
global real estate advisor. KNIGHT FRANK
+44 20 7861 1239
DAVID JI, HEAD OF RESEARCH
KNIGHT FRANK GREATER CHINA
JAMES.ROBERTS@KNIGHTFRANK.COM +852 2846 9552
DAVID.JI@HK.KNIGHTFRANK.COM
LIAM BAILEY,
GLOBAL HEAD OF RESEARCH MATT WHITBY, HEAD OF RESEARCH
KNIGHT FRANK KNIGHT FRANK AUSTRALIA
+44 20 7861 5133 +61 2 9036 6616
LIAM.BAILEY@KNIGHTFRANK.COM MATT.WHITBY@AU.KNIGHTFRANK.COM
The combined group have strategy, leasing, workplace highly developed and enviable
more than 12,500 property consultancy, tenant representation Valuations business who can
professionals, with more than and project management. manage the valuation of a portfolio
370 offices around the world; this of global assets from a single
Our Global Capital Markets
global commercial and residential location whilst working closely C AV E AT S
teams operate from five core
capability allows us unrivalled with our teams at a local level.
regions, the UK, Europe, Asia,
access to wealth, properties and
Middle-East and The Americas. Our track record of trust and This report is published for general information Many external sources regarding Skyscrapers or damage resultant from the contents of this
occupiers in 55 countries.
We have unrivalled access integrity means we, together, are only and not to be relied upon in any way. have been consulted for this report, but forecast. As a general forecast, this material
Our integrated office network to institutional, corporate, becoming increasingly recognised Although high standards have been used in the the information has been cross referenced does not necessarily represent the view of
enables us to offer clients a dedicated sovereign and private wealth. preparation of the information, analysis, views against Knight Frank and Newmark Grubb Knight Frank in relation to particular properties
as the advisor of choice in the
service from our headquarters in and projections presented in this report, no Knight Frank’s proprietary knowledge, and or projects.
Our Office Leasing teams are global real estate market. With responsibility or liability whatsoever can be information kindly provided by several firms
London and New York City. Together, our best-in-class advice, and
appointed on some of the most high accepted by Knight Frank LLP for any loss or in the development sector regarding their
we are strengthened by the specialist ability to deliver seamlessly in damage resultant from any use of, reliance on or specific skyscraper projects. This explains
desks we have created in these cities, profile buildings around the world,
collaboration, we set ourselves reference to the contents of this document. any disparities between data in the report and
devoted to further enhancing our including The Shard in London,
apart in the global market place. As a general report, this material does not that quoted elsewhere.
global client relationships. Gateway in Sydney, SRE Finance
necessarily represent the view of Knight Frank COPYRIGHT:
Centre in Shanghai and the Empire The combination of our people, LLP in relation to particular properties or projects.
We have a highly developed Global @ Knight Frank LLP 2015
State Building in New York. The network, research and technology
Corporate Services business Within this report all figures quoted for 2014 are FORECAST CAVEAT: Reproduction of this report in whole or in part
strength and depth of our Leasing has helped us grow our enviable year-end.
with hubs in London, New York Forecasting is an inherently uncertain is not allowed without prior written approval of
and Tenant Representation track record and, for that reason, Knight Frank LLP to the form and content within
and Hong Kong. Working with This report was largely written in March 2015 activity and subject to unforeseen changes
business enables us to offer clients a clients come back to us time and based on available data and drawing from the which it appears.
occupiers of commercial premises in the external environment. Although
truly global service. time again. business news and market sentiment at the high standards have been used in the Knight Frank LLP is a limited liability partnership
our teams are able to offer an time; then going to press in early April 2015.
To complement our Capital preparation of the information, analysis, and registered in England with registered number
outstanding level of service Our objective is to deliver projections presented in this forecast, no OC305934. Our registered office is 55 Baker
Markets, Tenant Representation Rent figures quoted for cities in the Americas,
globally, regionally and at a country uncompromising standards, our are prime average asking rents. Rents legal responsibility can be accepted by Knight Street, London, W1U 8AN, where you may look at
or city level. We excel at portfolio and Leasing teams we have a clients deserve nothing less. elsewhere are quoted normal prime achieved. Frank Research or Knight Frank for any loss a list of members’ names.GLOBAL SKYSCRAPERS
CITIES 2015 REPORT
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