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2012-01-11 13:36:57
here is an "unhealthy correlation" between the building of skyscrapers and
subsequent financial crashes, according to Barclays Capital.
Examples include the Empire State building, built as the Great Depression was
under way, and the current world's tallest, the Burj Khalifa, built just before
Dubai almost went bust.
China is currently the biggest builder of skyscrapers, the bank said.
India also has 14 skyscrapers under construction.
"Often the world's tallest buildings are simply the edifice of a broader
skyscraper building boom, reflecting a widespread misallocation of capital and
an impending economic correction," Barclays Capital analysts said.
The bank noted that the world's first skyscraper, the Equitable Life building
in New York, was completed in 1873 and coincided with a five-year recession. It
was demolished in 1912.
Other examples include Chicago's Willis Tower (which was formerly known as the
Sears Tower) in 1974, just as there was an oil shock and the US dollar's peg to
gold was abandoned.
And Malaysia's Petronas Towers in 1997, which coincided with the Asian
financial crisis.
The 27-storey Antilia, the newly-built residence of Reliance Industries
chairman Mukesh Ambani, is seen in Mumbai on October 19, 2010. The 27-storey
home of one Indian family in Mumbai
The findings might be a concern for Londoners, who are currently seeing the
construction of what will be Western Europe's tallest building, the Shard.
That will be 1,017ft (310m) tall on completion.
China bubble?
Investors should be most concerned about China, which is currently building 53%
of all the tall buildings in the world, the bank said.
A lending boom following the global financial crisis in 2008 pushed prices
higher in the world's second largest economy.
In a separate report, JPMorgan Chase said that the Chinese property market
could drop by as much as 20% in value in the country's major cities within the
next 12 to 18 months.
In India, billionaire Mukesh Ambani built his own skyscraper in Mumbai - a
27-storey residence believed to be the world's most expensive home.
Local newspapers said the house required 600 members of staff to maintain it.
Reports suggest the residence is worth more than $1bn ( 630m).
"Today India has only two of the world's 276 skyscrapers over 240m in height,
yet over the next five years it intends to complete 14 new skyscrapers,"
according to Barclays Capital.
Barclays Capital's Skyscraper Index has been published every year since 1999.