If ever a tall building looked out of place, it’s the Tour Montparnasse in Paris.
The structure stands out like a sore thumb against the low-density historical urban backdrop of the city.
Take a look:
The 210-metre (689-foot) building contains mostly offices, which is unfortunate. The office sector suffered its worst performance in 13 years in Paris over 2022 — with sales volumes down considerably on pre-COVID levels.
At the top, there’s a restaurant and viewing terrace that attracts visitors wanting to experience the ‘breathtaking’ 360-degree view of the capital.
It’s said to be the most beautiful view in all of Paris.
But this is because it’s the only view in the city where the tower can’t be seen!
Despite being an eyesore, a competition to redesign the façade of the building in time for the Paris Olympics in 2024 is unlikely to do much to assist it in blending in.
The picture below emphasises why!
The project was always controversial.
In 1958, the first studies of the tower were launched. However, the project didn’t initially gain approval.
This wasn’t only due to its height — there are other design faux pas. For example, not all the offices have windows! Only those situated around the periphery.
That’s a major design floor. It’s a tower that I expect will have to be repurposed in years to come or suffer significant long-term vacancies.
Approval for construction finally came in the late 1960s.
This meant that it opened bang on time for the 1973 recession. Suffering from what is known as the ‘skyscraper curse’.
Believe it or not, this still remains one of our best indicators for timing the recessionary points of the real estate cycle.
Since skyscrapers were conceived, the curse has never let us down, as I explain here.
Two years after the Tour Montparnasse was completed, it was agreed that the design was so out of place that the construction of buildings more than seven stories high in the city centre would be banned.
That is, until ‘Tour Triangle’.
It’s a new super-tall building that began construction in Paris in 2021 — and it promises to look just as out of place against the skyline as Tour Montparnasse!
And if you’re wondering — yes — it’ll be built in the shape of a triangle.
Tower Triangle will resemble what could be described as a giant wedge of Toblerone chocolate.
Made of glass and steel, the 42-floor, pyramid-shaped skyscraper will contain 91,000 square metres of office space, a 130-room hotel, a childcare unit, and shops.
Source: The Guardian
Initially, the building was due for completion before the 2024 Paris Olympics.
However, in a historical echo of the controversial Tour Montparnasse, criticism of the design produced significant delays, spanning more than a decade and delaying the completion date.
That means — you guessed it — it should be completed ‘sometime in 2026’.
Right on time for the peak of this real estate cycle — cementing its fate to open on the precipice of the next global recession.
It’s doubtful that Paris needs additional office space — albeit its office market has been more resilient than other areas of Europe.
And because the project raised so much controversy, the ban on tall buildings of more than 37 metres (12 stories) has once again been reimposed.
Interestingly, China’s top economic planner has also just issued guidelines on banning the construction of skyscrapers more than 500 meters high and strictly limiting the construction of buildings more than 250 meters high.
Does that mean a potential end to the skyscraper curse in the future?
The next world’s tallest should be Jeddah Tower in Saudi Arabia.
Initially conceived in 2011 by the visionary billionaire investor Prince Alwaleed Bin Talal as a focal point for Jeddah Economic City.
His audacious vision involved erecting a towering skyscraper in the heart of Jeddah encompassing an impressive 167 storeys, replete with residential units, office spaces, and luxurious hotels.
The monumental structure would stretch to a staggering one kilometre in height – far surpassing the 600-metre mark that qualifies it for the coveted ‘megatall’ skyscraper designation.
It was initially due for completion during the mid-cycle recession in 2020.
However, construction stalled in 2018 due to issues with a contractor.
COVID lockdowns and financial issues impacted the project further.
To date, it is only one-third complete — 63 stories above the desert.
It could be that in the future, the mega projects that indicate future recessions are more like NEOM — Saudi Arabia’s new futurist city.
The name NEOM is a combination of two words: ‘neo’, which means new, and ‘mustaqbal’, an Arabic word for future.
The project was announced in October 2017 by Crown Prince Mohammed bin Salman as part of the Kingdom’s Vision 2030 plan to diversify the economy and reduce its dependency on oil revenue.
It is envisioned to be an independent and self-sustaining city, covering an area of around 26,500 square kilometres (approximately 10,230 square miles) and spanning parts of the north-western Saudi Arabian coast, the Red Sea, and the Gulf of Aqaba.
Note the dates the stages of construction are projected for completion, however.
They align nicely with the cycle’s recessionary points — as we would expect.
Saudi Arabia originally aimed to complete major parts of the project by 2020 (the mid-cycle of this current cycle), with an expansion completed in 2026 (the peak at the end of this cycle).
However, they fell behind schedule.
By July 2022, only two buildings had been constructed, and most of the project area remained a bare desert.
The completion date for most major projects is now 2039 (around the expected date of the mid-cycle recession of the next 18.6-year real estate cycle).
We’ll watch to see what other mega-construction projects will underpin our forecasts as the last few years of this cycle progress.
Regardless, the tall structures that give us the timing for the current real estate cycle will likely open with a large percentage of vacancies.
This has been a feature of the skyscraper curse for as long as it’s been charted.
As it is — despite bearish mainstream talk of rising rates and a potential pullback on prices — nothing has changed with the cycle’s timing.
I expect prices in the major capitals to keep trending up into the 2026 peak.
Editor, Land Cycle Investor