China’s “field of dreams”, “build it and they will come”, approach to construction has taken on truly bizarre proportions, with the opening of the biggest building in the history of mankind: a 19 million square foot (1.77 million square metre) complex with a village, shopping centres, hotels, a water park and, wait for it, its own artificial sun underneath its 100 metre high ceiling.
From the Daily Mail:
The world’s largest building has opened in China capable of fitting 20 Sydney Opera Houses – or three Pentagons – inside.
The New Century Global Center in Chengdu, Sichuan province, is a staggering 19million sq.ft. and contains shopping centres, a Mediterranean village, a water park, an ice-skating rink, and multiple hotels.
However, visitors to the glass panelled building need not worry about the weather as the giant complex will have its own artificial sun.
The building is 500 metres long, 400 metres wide and 100 metres high, reports said.
According to Chinese officials, the New Century Global Center is the largest freestanding building in the world, and took three years to complete.
Some of the photos of the complex are provided below (for others, check out the Daily Mail website):
What is arguably most worrying about such projects in China is that they are being built without regard to actual demand. Retail vacancies across China are already high and increasing further still amid the rapid construction. From Bloomberg:
Chinese landlords are forgoing rent and paying to outfit stores for mass-market fashion brands including Zara and H&M, a bid to blunt the impact of a boom in shopping-mall construction that threatens to push up vacancies…
Half of the 32 million square meters (344 million square feet) of shopping centers under construction around the world are in China, according to CBRE Group Inc. (CBG) About 21 million square meters of retail space is expected to be completed by next year, a 38 percent increase in supply, according to broker Cushman, which tracks 20 cities in China…
Vacancy rates in some less affluent cities could surge to more than 30 percent by next year from as low as 6.8 percent in the first quarter this year, Cushman forecasts…
Mall space in China’s four major cities will grow about 40 percent by the end of 2015, while in 16 smaller cities it will double in the period, according to Steven McCord, China retail research director at property brokerage Jones Lang LaSalle Inc. (JLL).
Developers of some new malls may struggle to reach even 70 percent occupancy…
It’s hard to see how such levels of construction – be it retail, residential, or infrastructure – are sustainable, which once again raises the question of whether China’s current high demand for iron ore and coking coal (both used in steel production) can be maintained.
Knowing when the downturn in Chinese construction will come is impossible to predict. But when it does, it could obviously have devastating implications for Australia’s two key commodity exports.
