Taking a quick look around, it’s impossible to overlook the tall buildings cropping up. The already established high-rise buildings will not remain so unique for a very long time – probably having been surpassed in a few years. This is the new allure. Yet, there is still concern with respect to the related economic, environmental and social implications.
High-rise projects often encounter obstacles and lack of cooperation between the part of society attracted to these developments and that which is not, creating a risk of a social divide and relative poverty. It is up to Government to ensure social cohesion by directing government revenue from these investments to social aspects. Furthermore, it needs to ensure that investors manage and handle these issues appropriately. The private sector should be expected to take at least part of the responsibilities by contributing to the necessary infrastructure and the environment, like appropriate access and traffic diversion for projects to run smoothly and avoid gluts and bottlenecks. After all, this is in the best interest of the investor, as insufficient quality in infrastructural services and environmental amenities would nullify the significant expenditures undertaken in individual projects. This is only possible through appropriate policy design and rational business decision-making.
Notwithstanding these concerns, this new type of development will provide Malta with a facelift. For many years, Malta has seen its economy grow through the development of traditional sectors. These sectors have led the economy to where it is today, yet they have become almost fully-fledged and in order to stay ahead of the game, Malta needs to reinvent itself.
Re-innovation can be considered and possibly extended towards a holistic lifestyle proposition where Malta becomes a unique region where it would be possible to lead a healthy life, seek recreation and entertainment, obtain quality medical services and education, and of course, work in higher value added services where physical distances are not an obstacle, built around Malta’s characteristics and aspirations for work and quality of life, and environmental and social capital whilst ensuring maximisation of efficiency and effectiveness in business and public expenditure. Serving as a cosmopolitan centre for global and home-grown talent to intermingle will lead to further economic growth and wealth. Investment in high-rise buildings is an innovation and a diversified type of investment which will definitely contribute towards this new lifestyle proposition.
This new lifestyle proposition will address and possibly attract new individuals to Malta. For instance, investment in high-rise buildings could specifically target high-end niche markets attracting different individuals from the usual types of tourists Malta has received over the years, who will have no problem with spending money in our economy.
There are other positive implications to consider. In a country of Malta’s size, land is scarce. Malta is already significantly developed and unless we want to take over the entire land, it’s no longer possible to build horizontally, instead making it more plausible to start building vertically. Building more densely is a concept that can be observed in many major cities. The most important aspect of this is the location. High-rise buildings need to be clustered and located in commercial areas that attract people who want to do business and generate business. Having business, workers and activity clustered in one area will contribute to higher productivity and higher contribution to value added.
There are also environmental benefits to high-rise buildings. This type of construction reduces land uptake and allows for development without necessarily taking over green spaces. The idea is not to cover the entire country with tall buildings, but to create a strategic balance between what is already built, skyscrapers and the rest of the land space.
To succeed, investments in high-rise projects need to be geared in such a way that they attract global demand. While the growth of existing business and relocation is important, they presumably occupy a minor share of the new developments. As such, it is important for the economy to be selective by becoming innovative and diversifying as much as possible. High-rise buildings will target a new niche market, attracting new people and new types of expenditure which are not yet catered for.
In light of this, it is time for investment to be prioritised according to market readiness and the ability to best meet the needs of the economy – including diversification into new service activities. Investment in high-rise buildings is a new and interesting proposal for Malta, as long as certain safeguards are in place. Provided that investment is adequately timed and managed appropriately, this investment will prolong economic growth.