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REAL ESTATE: Why does Tianjin need tall buildings?
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Why does Tianjin need tall buildings?

By Chelsea Cai, Senior Analyst at JLL

BT 201507 34 Real Estate PlayingWithMyNewCamera2544China has been in a decade's long building boom for everything from basic infrastructure such as road and rail to residential property and shopping malls. Office buildings and residential towers are now changing the skylines of Chinese cities and capturing the public's imagination. Originally, these super tall buildings (above 300 metres) were limited to Beijing and Shanghai, but we are long past that point. Now even second and third tier cities are competing for the title of having "€œthe tallest buildings"€ in China. Tianjin, the largest coastal city in northern China and a city with exceptional GDP growth rate, is currently right in the middle of this race. But why are these buildings needed in this city, which is famous for its low-rise and beautiful colonial architecture?

BT 201507 37 Real Estate 002Urbanisation affects the changing needs of the city
As well-educated and highly skilled workers immigrate to cities for better job opportunities and educational resources, more living space is needed for accommodating residents, and land is becoming very scarce. According to a McKinsey study, more than half of the world's population lives in cities, and that figure is likely to increase to 60% by 2030, adding 1.4 billion more people than today. China is leading the way with a large number of cities already topping 5 million and a handful that have surpassed 10 million. If such changing demographics increase in a short period, often the living space cannot meet people's needs. More importantly, the negative effects of urbanisation "pollution, overcrowding and slums "will occur as a result. Beijing and Shanghai have benefited from the increase in population but also suffered from the increase in congestion and the related effects.

To solve the problem, urban leaders realised that a valuable solution is high-density developments"€œbuilding up, rather than out"€. Therefore, the key reason that growing cities such as Tianjin needs tall and high-density buildings is to help save land as well as increase cost efficiency and the employment capacity.

BT 201507 35 Real Estate Tianjin 10Building cities for tomorrow
Today's best cities will probably not be the best cities of tomorrow if they can't evolve and adapt. To continue to be the best, cities have to plan for change, since market conditions are always evolving. A crucial reason Tianjin needs better urban planning is that it has had strong economic growth. This is probably why it appears city officials have embraced the opportunity to have tall buildings replace the low density buildings that previously existed downtown.

Tianjin's GDP growth rate has been at double-digit levels for more than a decade, reaching USD 250 billion in 2014, and it is forecast to surpass Hong Kong in 2020 according to a McKinsey study. Meanwhile, the tertiary industry has increased rapidly, reaching 49% of economic output by the end of 2014.

Furthermore, Tianjin's economy continues to grow, pushed by both government and foreign capital. Tianjin also has the largest cargo seaport in northern China and has positioned itself as an attractive site for investment. In April, a new Free Trade Zone (FTZ) was officially implemented in Tianjin. The Tianjin FTZ aims to exploit the potential for economic growth by promoting the Capital Economic Circle, the Beijing, Tianjin and Hebei integration plan.

None of these things themselves may require tall buildings, but if each factor drives the economy, the service sector will likely continue to grow and tall buildings can house more workers and residents in a thriving metropolis. Moreover, favourable policies will attract new businesses to set up branches in the city. Another reason is that when specific industries, such as the IT industry, expand their office space regularly, tenants like to choose tall buildings because of the flexibility they offer.

Saving space to avoid heritage destruction
Another challenge Tianjin faces is the preservation of the historical buildings in the clustered business district. Tianjin used to be home to concessions of Western countries. The resultis the different architecture of the old buildings that are spread throughout the city's core area.

Although historic buildings are not as efficient and occupy space in premium locations, these buildings give a physical representation of the city's history that can be visual reminders for future generations. St. Joseph Cathedral, also known as Lao Xikai Catholic Church, situated next to Nanjing Road, is an example of a historic building located in a prime location. To ensure future generations are able to enjoy the history and appreciate the old architecture, tall buildings are being built to make the best use of land.

Making cities architecturally interesting
When speaking of Burj Khalifa or Willis Tower, people will probably think of Dubai and Chicago. This is another reason why a city favours tall buildings: they help a city to become a brand. The seaport and Haihe River offer scenic views and Tianjin offers other unforgettable attractions as well, both built and natural, but the city that aspires to be taken seriously wants an extremely tall building or two as a landmark and to create a beautiful skyline.

Tianjin is trying to develop its tourist industry to ensure that visitors view the city as an unforgettable experience. In recent years, the Haihe Riverside has developed several attractions aimed at attracting both local residents and tourists to enjoy the view along the river.

Tall buildings strategy is valuable to Tianjin
Tianjin can use tall buildings to achieve several goals. First, it can help bring in density, while preserving large sections of the historic European architecture which makes Tianjin so unique. Second, Tianjin can use tall buildings to house and grow a robust service sector economy that needs modern, but flexible space. Lastly, tall buildings with modern styles will help redefine the skyline and enhance the city's global image creating city pride and an international identity.

BT 201507 36 Real Estate 001

Table: Select list of tall buildings in Tianjin

*Residential projects developed by Kerry Properties.

Source: JLL, CTBUH


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