Monday, November 15, 2010

Real Estate November 11, 2010, 11:00AM EST London's Rising Towers May Presage a Shrinking Economy

From Bloomberg Businessweek...

"If hemlines tell which way the stock market is headed, maybe city skylines do the same for the economy. Tall stories often have unhappy endings.

That thesis certainly holds up in London, where new towers are sprouting. British Land, the U.K.'s second-largest real estate investment trust, has revived plans for a 47-story tower in the City of London dubbed the "Cheese Grater." Land Securities Group, its bigger rival, has found backers for its "Walkie-Talkie" building, which will be 10 floors shorter. Next to London Bridge, cranes are attaching glass panels to the soaring frame of the "Shard of Glass." Designed by architect Renzo Piano, the 1,017-foot (305-meter) pyramid will dwarf the other buildings north of the Thames to become Britain's tallest.

The history of this global capital suggests vertical ambitions often presage a southerly direction for the economy. In mid-2004, Britain was enjoying its 48th consecutive quarter of gross-domestic-product growth, while Swiss Reinsurance was moving into a 40-story edifice in central London nicknamed the "Erotic Gherkin" for its resemblance to a swollen pickle. Four years after the Gherkin opened for business, the British economy was in recession, and continued to shrink for five quarters."

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