‘Construction shift east’ set to continue, says Allianz

Allianz Global Corporate & Specialty’s (AGCS) regional engineering manager for Asia Chris van Gend has told StrategicRISK that South East Asia is now home to almost 50% of the tallest 100 buildings in the world.

Furthermore, the “construction shift east” is set to continue, van Gend said, driven by rapid economic and demographic growth, urbanisation, strong investor appetite for flagship real estate assets, and lower labour costs than in the traditional Western markets.

“There remains a strong local appetite for such construction projects as well as significant levels of investment to fund them, increasing population levels – China now has close to 1.4 billion people – and a rapidly urbanising population,” van Gend told SR.

“Comparatively lower labour costs is also a factor – European and American countries account for 12 of the top 20 countries compared with just two in the Middle East. China is only ranked 30th.”

Speaking to SR about issues raised in AGCS’s most recent Supertall Buildings Risk Bulletin, van Gend said that more than half of world’s tallest buildings had been built in last four years, with the total ‘supertall’ category almost tripling in the last seven years.

Rise of China

China would potentially have 10 of the world’s 20 tallest buildings in six years if current projects came to fruition, van Gend added. China already boasts 30 of the tallest 100 buildings across 15 cities, and initial plans were recently announced to build a one-kilometre-tall building, the Phoenix Towers, in the central city of Wuhan.

A former head of the Asia-Pacific hub for Catlin’s energy and construction lines of business before moving to AGCS last year, van Gend said this situate posed new challenges for Asia’s risk management community, not to mention insurers, architects and contractors.

“Increasingly complex high-rise building projects present significant risk challenges, meaning insurance claims and risk consulting services are particularly important on a construction site,” he said.

“Impact of any seismic or natural catastrophe activity – in particular flooding during the construction stage – the threat posed by wind loads and fire, choice of building materials, and the unique complexity of managing projects that can involve as many as 10,000 workers and over 100 subcontractors represent the key risk challenges.”

Singapore-based van Gend added that technical issues that significantly affected design and construction works included pumping and placing concrete at extreme heights; craneage and lifting items to such heights; and significant variation in wind speeds between ground level and higher levels.

“In addition, maintaining verticality as the building height increases; elastic shortening of constructed building elements as the imposed weight from the completed building increases; maintenance and repairs of inside and external elements; and building services provisions- electrical, water and sewer disposal,” he said.