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Rising Architecture Markets: Busan and Panama City Invest in High-Rises

These two cities built almost a quarter of the world’s high-rise buildings last year

By Layla Bellows

When the Council on Tall Buildings and Urban Habitat (CTBUH) released its most recent annual report, the two cities that led the pack for tall building completion came as a surprise to some: Panama City, Panama, and Busan, South Korea. Together, projects in these two cities accounted for about 22 percent of all 200-plus-meter buildings completed in 2011, putting their growth as a tall building market ahead of well-recognized cities such as Dubai and Shanghai. (China as a whole still dominates the tall building market, with 23 new high-rises in 2011.)

In Panama City from 1997 to 2010, three buildings more than 200 meters tall were completed. But in 2011 alone, 10 buildings over 200 meters were built, more than any other city in the world and double the number of tall buildings completed in the rest of the Americas. Meanwhile in Busan, between 1997 and 2009 only one building taller than 200 meters was completed. Of the 20 buildings either completed in 2011 or under construction, nine are slated to be this tall, second only to Panama City.

Although Panama City and Busan are located on opposite sides of the world, they have much in common. Both owe a sizable share of their prosperity to their ports, and both are in countries that boast a healthy economic growth rate, with Panama’s estimated at above 10 percent—a figure even China can envy. For American architects looking to expand their portfolios overseas, both Panama and South Korea already have friendly relationships with the United States. Architects wary of the post–building-boom and recession hangover have even more reason to look to these two cities: Because both owe a great deal of their growth to their ports and economic status as industrial trading hubs, they are more economically stable than cities that gorged on speculative real estate in the days leading up to the 2008 crash.


Although South Korea’s second-largest city boasts the country’s largest and the world’s fifth-largest port, it flies under the radar of most Americans. “Once you actually start working in Korea, you realize the significance Busan has for both the Korean economy and the culture,” says Brant Coletta, AIA, managing director at SOM’s New York office. “It has tremendous resources and a need for commercial development.” Currently, Coletta directs SOM’s Korean practice, and is managing the development of the Busan Lotte Town Tower, a 1,700-foot mixed-use tower currently under construction. When it opens in 2016, it will be Busan’s tallest building.

Busan has experienced a great deal of building growth over the past decade, including a major spike in tall building construction. Sang Dae Kim, CTBUH’s vice chairman and a professor at Korea University’s School of Civil, Environmental, and Architectural Engineering, says that the uptick has been driven primarily by private investment and developers, with residential projects accounting for approximately 70 percent of the tall-building market. “Currently there are high demands [for] high-quality residential apartments in Busan, and there are more investments coming from Japan since the tsunami happened last year,” he says. The vast majority of design work for buildings 70- to 100-stories tall is handled internationally, Kim says, but Korean firms have been designing more midrise buildings. Young Keun Han, chairman of the Korean Institute of Architects’ International Affairs Committee, says that mixed-use programs are on the rise, but on the whole the city needs more hotel and office facilities.

Not surprisingly, Han says that architects with specializations in ultra-high-rise buildings are primed to lend their expertise to the country. Coletta also sees opportunity for architects with deep knowledge in sustainability. “Sustainability has seen a dramatic change in Seoul, and I believe it is coming to Busan, where the energy requirements in the buildings are some of the highest I’ve ever seen,” he says. For example, at least 1 percent of a building’s construction cost has to be dedicated to renewable energy sources.

For foreign architects working in Korea, the ability to work across cultures is vital. “Korea is extremely unique in that its architecture and engineering community is very sophisticated, but in many respects it is also very insular,” Coletta says. “They’re able to rely on these great architects and great engineers to do a lot of their work. There’s been a desire for quite some time to involve foreign architects at the conceptual level and planning level, then transition responsibility to local architects in a design collaboration format.”

This level of respect lays the groundwork for relationships and partnerships that can be beneficial in the long term. Coletta believes that building genuine relationships in Korea is key to working there, something Kim agrees with. “It is critical to network with Korean developers,” Kim advises. “A relationship with local architecture offices in Korea also can be beneficial for exchanging information about Korean developers.”

Panama City

“Panama has been growing amazingly for the past seven years without anyone knowing or really believing it could happen,” says Ignacio Mallol, of Mallol & Mallol, a 30-year-old, 120-person architectural firm, and the largest in Central America.

Although 2005 is frequently cited as a turning point in both the country’s economy and high-rise development, both Mallol and Eladio Guardia, a structural engineer who leads Walter P Moore’s Panamanian operations, trace it back to 2000, when the U.S. transferred ownership of the Panama Canal to Panama. “The canal brought us opportunities we didn’t have before,” Mallol says. “This came along with all the other things happening in Panama. The country was investing in tourism and trying to expose both the city and the country internationally.”

The transfer, coupled with the canal’s multibillion-dollar expansion and the city’s reputation for safety and security (as well as its tax incentives and a number of other programs) caught the eyes of multinational corporations such as Dell, HP, and Caterpillar that were interested in establishing or relocating regional headquarters. “When a large company hires 3,000 employees in the region, that creates a need for more residential development [and] better hospitals,” Guardia says.

Tall buildings aren’t exactly a new idea in Panama City. Mallol says private developers started building them in the 1970s to address what was already a scarcity of land inside the urban center. “Today the land is more expensive, so if you want to build in the center of the city, you need to build towers,” Mallol says.

Although there has been a decrease in the amount of construction permits in Panama City, Guardia says there are still a number of developments in the pipeline, though some markets are saturated. “The hotel industry is one example,” he says. “There was a point at which it seemed everybody was building a hotel.”

Although a great deal of office space has been built, Guardia says there is a need for “more sophisticated office spaces. Clients are getting more sophisticated in what they’re looking for, which has opened the door for architects from the U.S.”

The degree of specialization architects in the U.S. have, in Mallol’s view, makes them an asset for a burgeoning market like Panama City’s. “I believe there is a really big opportunity for consultants here, for experts in each type of discipline,” he says.

Sustainability experts also are primed for work in this market. “U.S. architects design from the inside out,” Guardia says. “They have built very efficient buildings here in Panama, and that has opened the door for the developers who are not looking just for a cool-looking or pretty building; they are looking for an overall efficient building that maximizes their profits.”

Partnering with the local labor force and design community is, of course, an essential element of working in a new international market. Guardia says that for U.S. firms to be competitive, a mix of local labor needs to be involved with any commission.

Mallol sees the high-rise growth in Panama City as an opportunity for the international design community not just to find work, but also to exchange expertise: “We have this idea of being a melting pot and bringing in ideas and knowledge from every part of the world. I believe this will enrich our experience and our city.”


Rendering of SOM’s Busan Lotte Town Tower. Image courtesy of SOM, Gems Studio.

Tower Financial Center building in Panama City, designed by Pinzon Lozano & Asociados Arquitectos. Image courtesy of Raul Pinzon Williams.


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