London Update
Issue 33
Feature Article: Reaching New Heights in Construction
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Feature Article: Reaching New Heights in Construction
Paula Hawkins
Some cities are almost synonymous with skyscrapers. Manhattan will always be renowned for its dramatic skyline and Dubai is working furiously to achieve the same recognition. It is estimated that anything from 15 to 50 per cent of the world's cranes are currently concentrated within Dubai's 35 km2. A large proportion are also employed in China, which is home to six of the world's 10 tallest buildings.
London, by contrast, has never been known as a high rise City. The UK's tallest building, One Canada Square at Canary Wharf in London, ranks only 196th in the list of the tallest buildings in the world and 11th highest in Europe. Moreover, number two on the list is the Crystal Palace transmitting station which was built way back in the 1950s. Over the past decade, however, London has become home to a number of new high rises: in 2002 numbers 8 and 25 Canada Square were completed, joining Canary Wharf's iconic tower, while 30 St Mary Axe ('the Gherkin') was finished a year later in 2003. Also completed that year were 25 and 40 Bank Street in Canary Wharf, while One Churchill Place joined the cluster of Docklands' high rises in 2004. Not to be outdone, the City's Broadgate Tower was finished this year.
| The World's Record Breaking Structures | |||
| From | Until | Name | Height |
| 2600BC | 2570BC | Red Pyramid, Egypt | 105m |
| 1300 | 1549* | Lincoln Cathedral, England | 160m |
| 1889 | 1930 | Eiffel Tower, France | 300m |
| 1930 | 1931 | Chrysler Building, USA | 319m |
| 1931 | 1967 | Empire State Building, USA | 381m |
| 1968 | 1975 | Oskatino Tower, Russia | 537m |
| 1975 | 2007 | CN Tower, Canada | 553 |
| 2007 | present | Burj Dubai, UAE | 807 |
| *The Cathedral's spire collapsed in 1594 but the 160m record remained until 1889 when the Eiffel Tower was completed for the 1889 World Fair | |||
Until recently residential high rises were extremely unfashionable: think residential tower and the image that most often sprang to the British mind was of an ugly concrete council block, more likely than not built in the 1960s. But over the past few years residential towers have become a great deal more desirable thanks to the quality of the buildings and the facilities on offer.
The likes of Pan Peninsula's, twin high rise towers and The Landmark's 45 storey and 31 storey towers in Canary Wharf are setting new standards for residential living in the capital. In fact, The Landmark has received two internationally recognised awards (for best high rise architecture and best high rise development) and when completed in 2010 will offer the highest residential property in London.
Until the 1800s, the tallest conventional buildings in cities rarely reached higher than 10 stories: the higher a building was constructed, the more material you needed at the bottom of the structure to support the weight above. While this worked in the deserts of Egypt, it was not feasible in densely populated European and American cities.
Mass iron production revolutionised the way that buildings were constructed and allowed architects and engineers to be much more ambitious in their plans. Advances in manufacturing processes meant it was possible to produce much longer beams of solid iron. However it was the Bessemer process, which was the first efficient way of mass producing steel (a lighter and stronger metal than iron) which made the first skyscrapers possible.
Other technological advances were also necessary: once a building rises above six or seven stories stairs become somewhat impractical. Higher buildings needed to incorporate elevators and the taller the building, the higher its number of occupants and the more elevator shafts are necessary.
Most skyscrapers are supported by a steel skeleton: vertical beams are riveted together and connected by horizontal girder beams. In most cases, diagonal beams run between the girders providing extra support. This construction allows the weight of the building to be more evenly distributed, reducing the strain on individual girders and allowing a higher build. In addition, most skyscraper columns rest on a spread footing which has a pyramid structure spreading out below ground, distributing the weight from the column over a wider surface.
During the 1970s, the construction of high rises began to change. The Twin Towers of the World Trade Centre, destroyed in the terrorist attacks of September 2001, were among the first high rises to use a tube structure. This involves the construction of a rigid hollow tube of closely packed steel columns with floor trusses extending from the core of the building to its perimeter. The advantage of the tube structure is that it allows buildings to withstand stronger winds, while also eliminating the need for interior columns which take up valuable floor space and provide more open floorplates.
The construction of a residential tower in the UK today involves, first and foremost, a great deal of paperwork and bureaucracy which must be completed before ground can be broken. After an initial investment appraisal, a design team must be appointed, advice sought regarding planning and a public consultation undertaken. Detailed designs must be drawn up and various surveys conducted, environmental and sustainability appraisals must be carried out. There is also an investigation of ground conditions and to detect unexploded ordinance (which can be a common problem, particularly in heavily-bombed areas such as the east end of London). Strategies must be devised to cope with transportation and refuse, and a full planning application and buildings regulations application submitted to the relevant authorities.
Only then can the real work begin, starting with demolition and site clearance. After excavation, the foundations are laid, cores and basement constructed and then the structural framework of the building can progress. The roof comes next, followed by the main systems; and then the rest of the building, the flesh on its bones, can be added. Partitions, divisions, floors and ceilings are added, followed by the installations of kitchens and bathrooms.
But how high can we go? The quest for height, driven by the egos of architects, engineers and the heads of corporations whose names are given to these buildings, continues. At present, there are around 50 proposed buildings which would beat Tapei 101, the current world record holder. Some of these, like Burj Dubai in the United Arab Emirates, are already under construction.
| The World's Tallest Buildings Today | ||
| Name | Place | Height |
| Tapei 101 | Tapei, Taiwan | *508m |
| Shanghai Financial Centre | Shanghai, China | 492m |
| Petronas Towers | Kuala Lumpa, Malaysia | *452m |
| Sears Tower | Chicago, USA | 442m |
| Jin Mao Tower | Shanghai, China | *420m |
| International Finance Centre II | Hong Kong, China | *413m |
| CITIC Plaza | Guangzhou, China | *391m |
| Shun Hing Square | Shenzen, China | *384m |
| Empire State Building | New York, USA | 381m |
| Central Plaza | Hong Kong, China | *374m |
| *including spire | ||
| ...How London's Top 10 Compare | |||
| Name | Floors | Year | Height |
| One Canada Square | 50 | 1991 | 235m |
| Crystal Palace Tower | n/a | 1950 | 219m |
| 8 and 25 Canada Square | 45 | 2002 | 200m |
| BT Tower | 34 | 1962 | 191m |
| Tower 42 | 42 | 1980 | 183m |
| 30 St Mary's Axe | 40 | 2003 | 180m |
| Broadgate Tower | 35 | 2008 | 161m |
| One Churchil Place | 32 | 2004 | 156m |
| 25 and 40 Bank Street | 33 | 2002 | 153m |
| 10 Upper Bank Street | 32 | 2003 | 151m |
But unless significant technological advances dramatically change the way in which we build, there is a limit to how much higher we can go.
| The Future Tallest Buildings...? | |||
| Name | Place | Completion | Height |
| Burj Dubai | Dubai, NAE | 2009 | *807m |
| Chicago Spire | Chicago, USA | 2012 | 609m |
| Abraj Bait Towers | Mecca, Saudi | 2010 | *595m |
| China 117 Tower | Tian Jin, China | 2012 | 570m |
| Freedom Tower | New York, USA | 2013 | *541m |
| *including spire | |||
Many experts predict that we could, using current technology, build as high as a mile – while others argue that until lighter, stronger materials and faster elevators can be constructed, the upper ceiling for the modern skyscraper will fall quite some way short of that.
Paula Hawkins
Paula writes on the residential property market for a range of national newspapers including The Times, The Independent, The Sunday Telegraph and the Evening Standard.
Government in Surprise 0.5% Base Rate Cut
In a coordinated move to unlock the economy and bring fluidity back to the financial markets, the Government announced the largest cut in base rate since the events of 9/11. At the time, Neil Young, Young Group's CEO, was quick to point out that the benefit would only immediately be felt by the 30% of owners with tracker mortgages and that it remains to be seen whether the persisting higher LIBOR rate means that banks are reluctant to reflect the base rate drop in their new products and variable rates.
Has Inflation Peaked?
The consumer price index (CPI) jumped to a 16-year high of 5.2% in September, exceeding consensus expectations. Energy price hikes were blamed for part of the leap, but core inflation (excluding such items) also rose.
London sees Demand for Rental Property Soar
Hamptons' latest housing market research shows that although rental prices in some parts of the UK have peaked, London saw a 27% increase in applications for rented homes in the last quarter. However, food inflation fell for the first time since March and petrol prices were down 1.5%. Citigroup is forecasting inflation of 4.9% for October, falling below 4.0% in mid 2009 and back to the target of 2.0% by the end of next year.
Buy-to-Let Lending on the Up
Despite the reduced variety of buy-to-let products available, there was a significant increase in the number of borrowers taking out buy-to-let mortgages in September, as increasing numbers sought investments away from the money markets. The 58% increase in the number of buy-to-let mortgages being taken out is the biggest monthly rise in over 12 months and follows a steady increase since July, says Spicerhaart.
Affordability and Uncertainty Buoy Rental Market
Meanwhile, the number of first-time buyers taking out a mortgage fell to an all time low according to latest data (August) from the Council of Mortgage Lenders (CML) and affordability remains a severe constriction. This is buoying the rental market as those unable, or unwilling to get onto the property ladder are renting property in record numbers.
Construction Grinding to a Standstill...
Despite a much publicised oversupply of new property in some regional cities, housing remains in undersupply in many areas, particularly London and the south East and the Government's goal of providing 2m new homes by 2016 remain out of reach according to the Royal Institution of Chartered Surveyors (RICS). Construction levels are declining and slowing; only 66,220 new homes have been built this year and the next quarter is predicted to yield fewer than 25,000. This represents a 50 year low according to analysis of official data by The Independent.
...Whilst Demand is Higher than Predicted
London Councils, which represents councillors from all London boroughs has successfully lobbied the Government for changes to the way that population statistics and forecasts are derived. The group maintains that London's population is swelling at an even faster rate than predicted because official data fails to adequately account for the complexities of migration and population churn.
The Crown Estate Targets London Resi Investment
As part of a strategy to reduce exposure to the office and retail markets, the Crown Estate is moving into the midmarket residential lettings business. The group is actively seeking investment property and has already bought a number of sites to kick start the new drive, having recently completed on a 58 flat block in SE1 and 50 apartments at Merchant Square in Paddington intended for short-term residential leases. Chief Executive, Roger Bright said “We believe in the future of the rented sector, particularly in London's potential for out-performance.”
Crossrail Secures Canary Wharf Funding
London's £16bn Crossrail project will receive £100m from property developers after Tower Hamlets council granted outline planning consent for the Wood Wharf development. The 20 acre site to the east of Canary Wharf will include 6 towers with 4.9m sq ft of office space as well as 6 residential towers, a hotel, canal and shops, restaurants, bars and cafes. Work on the station at Canary Wharf, due to open in 2014, was reported to have begun this weekend.
City Flights Take Off
As predicted in last month's issue, City Airport has won permission to increase capacity by close to 50%. The airport has already invested heavily in facilities to cope with additional flights as an increasing number of business passengers make use of the terminal to avoid increasing congestion at London's main airports. BA plans to open the first long-haul route from London City to JFK next year.
US Embassy in Move to London's Southbank
A deal has been signed to move the US Embassy from its base in Grosvenor Square to a purpose built new home in Battersea at Ballymore's Nine Elms site. If approved by planners and congress the five acre site will be developed by the Embassy itself.
Torch Shines on Olympic Village Plans
The Olympic Delivery Authority has unveiled new designs for the London 2012 Olympic Village. Planning permission has been granted for the first 3 blocks of the 3,300 home site and 300 workers are already on site carrying out piling works.
Investors Hold Portfolios for the Long Term
This quarter's Young Index shows no evidence of an exodus from the buy-to-let sector. Figures show that only 2% of investors intend to sell investment property during the next 12 months. The majority are looking to the medium to longterm; more than 1/3 of respondents intend to hold their property investments for at least the next 10 years and more than 20% expect to retain their portfolios for longer than 15 years.
This should come as no surprise. By far the most common reason for people to hold property investments is to provide for their future. Their long term aim is to build wealth to boost their pension provision. Neil Young, Young Group's CEO, points out; “To a certain extent, short term market fluctuations aren't a concern to most investors as long as their property is financed appropriately and is paying for itself in the short term.”
The Young Index figures for this quarter also show that investor sentiment has held steady and not slipped, despite the current economic upheaval. Only 45% of investors believe that property prices in London will be lower than current levels by this time next year, and 10% expect to see an increase in value. However, the same sentiment does not prevail for property outside the capital.
98% will retain all their buy-to-let properties this year |
A Date for the Diary: Bond Noel 2008
Premier Clients are invited to join us at our offices in Bond Street to enjoy the annual Bond Noel evening. Details will be sent shortly, but be sure to keep 20 November free to bring in the Christmas cheer as Bond Street is transformed into a winter wonderland with Sleigh rides, and street performers.
Model & Actress Sophie Dahl Swithing on the Christmas Lights at Last Year's Event
Young Finance Assesses the Impact of the Rate Cut
It came as no surprise that the Bank of England announced a reduction in the base rate from 5.0% to 4.50%. What was a surprise was the timing; made a day ahead of the MPC's scheduled monthly announcement. This cut immediately benefited those with tracker mortgages already in place. Indeed many Young Finance clients, whose current mortgage deals expire within the next six months, had pre-applied for replacement tracker products and they too will benefit from the rate reduction, even though they have yet to draw down the new funds.
Early indications following the announcement show that lenders are being slow to reflect the base rate movement across their full range of mortgage products, and given that LIBOR (the rate at which banks themselves borrow money) has not fallen significantly, it is unlikely that lenders' new product will follow suit.
Young Finance is urging investors who have not recently reviewed their mortgage situation or are approaching the end of a preferential rate that now is the time to be proactive and use Young Finance's knowledge of the market to your best advantage.
Call Young Finance on 0845 356 1000 for a full, no obligation review of the options available to you. |
Young Index Winner Announced
Congratulations go to Kevin Woolcott of Chartwell Residential, the winner of the prize drawer of respondents to this quarter's Young Index. Kevin receives £100 of John Lewis gift vouchers.
Young London's Southwark Office: Opening Offer
Throughout November, to celebrate the opening of Young London's new Southwark office, the estate agency is offering local homeowners in SE1 the chance to sell their property for just 0.5% commission or to let for only 2.5% +VAT.
Call Young London NOW on 0845 356 1010 to find out more!
LANDMARK PHOTO EXHIBITON: 25 November 2008
Young Group is inviting purchasers at its Landmark development in Canary Wharf, and a number of Premier Clients, to attend a private photo exhibition charting the development's progress.
Hosted at the offices of Chalegrove Properties, the developer of our award-winning Landmark development, the exhibition focuses on The Landmark's emergence - from conception through to present day. It provides an insight not only into the construction process, but also the hard work undertaken to ensure that The Landmark becomes a local community hub.
Views South East from the 31st Storey of The Landmark West Tower
Guests will have the unique opportunity to hear insights from Michael Squire of The Landmark's acclaimed architects, Squire and Partners, whilst networking with other investors. There'll also be the chance to meet the Young Group team and Portfolio Managers will be on hand to answer any questions over canapés and cocktails.
If you've received an invitation by email, please RSVP to info@younggroup.co.uk or call 0845 356 1000 by 28 October.
London Update Feedback |
If you have any comments, or would like to respond to any of the issues raised in this issue of our London Update, we'd very much like to hear from you. moakes@younggroup.co.uk. |
Young Group specialises in providing Property Portfolio Management services to private investors; offering the best off-plan direct investment opportunities in London, as well as access to indirect, development fund investment opportunities through its development arm, Young Property. Young Group manages the entire investment process. For direct investments this spans from sourcing the opportunities through to financing, furnishing and letting.
Young Group owns all the property that it sells, and also retains a number of units in each development for its own portfolio. As the principal in every transaction, Young Group does not realise any profits until completion and has transacted in excess of 1,700 apartments, with a retail value of £700 million. The Group’s lettings division, Young Lettings, has successfully let the majority of investors’ apartments within a week of completion.
Young Group supports NORWOOD and CHILDREN with LEUKAEMIA, two charities particularly close to our heart, donating £50 per property exchange.
t: +44 (0)845 356 1000 e: info@younggroup.co.uk
