Town planning - and the small matter of civilisation

Almost answering any sensible reader’s question “So how do we and the architects progress?” after piling through his 1998 book Cities and Civilisation, Peter Hall mulls the manifest shortcomings of London’s urban experience in 1998 and writes that cities are “superbly worth living in” - and that those residents who can no longer abide them are always free to flee to the suburbs.

No blueprint, then – or at least, not on this occasion. He calls for policies to help the refugees: and in April 2009, no less, the public can see the results of President Sarkozy’s 10-architect show called Grand Paris 2030 which focuses on greening both the centre and - notably, for Paris - its suburbs.

More details about the show can be seen at ArchitectureLab:

http://architecturelab.net/2009/03/15/ten-scenarios-for-%E2%80%98grand-paris%E2%80%99-metropolis-now-up-for-public-debate/


Casting two fingers at UK planning’s holy of holies - the post-war legislation that staunched ribbon development just in time before SuperMac’s “you never had it so good Britain got into its stride” - one of Sarko’s architects, Antoine Grumbach, suggests Paris should extend north-westwards along the Seine to the Channel harbour at Le Havre.

True, Havre needs all the help it can get, and the design cheekily reproduces Buonapart’s idea of “one single city, to Havre via Rouen”.

Like a debutant marathon runner, could “civilisation in the long” survive such a long track, delivering a series of delights to the refugees? Away from the exhibition, surely it is better to focus on the 20:20 vision of petit projets.

Peter Hall in his book relates that a Parisian prefet called Autrant recognised in 1920 that many of the capital’s quartiers were ilots insalubres. His colleagues set about buying and demolishing ilot numero un.

The demolition of this numero un (by today’s standard) average-sized plot was not completed until 1935…with the site empty and vacant until 1972….when Rogers and Piano came along and created Centre Pompidou.

Hall tacitly acknowledges Paris’ determination, post-war, to create better transport has been successful.

He cites an architect, Delouvrier, as the genius of the piece – along with the leadership and (20:20?) vision of …De Gaulle.

But the mix - in 2009, and 2030 - of Sarko, Buonapart and Grumbach? Does not ring true.

(More details, please see www.paris.fr/ )

Bridging the gap: planning application resentment in south Cornwall

It took a Londoner at the beginning of March 2009 to shed some light on development issues that have bedevilled residents and workers in the attractive Helford estuary, south Cornwall, for a decade.

During that decade, a range of industries, the leisure trade and the innocent potterings of families-in-boats surrounding Helford have exerted increased pressure on its AONB and SSSI status: in other words, the resentments that have festered in south Cornwall are common to many communities in the UK, with growing 21st century populations bringing as many challenges as benefits.

The person who - for better or for worse, depending on your viewpoint - shed some light this March was London-based QC Tim Straker.

Employed by the 150-strong Helford Village Society (HVS) he mobilised sufficient argument to convince the High Court on 5 March 2009 that the proposed taxpayer-funded project to build a concrete jetty - where only rocks and seaweed currently exist, and which would project into the estuary, accessed by the vans and lorries of south Cornwall fisherman through very narrow village and valley lanes - should be abandoned, forgotten, cast into Davy Jones locker.

The relief and joy expressed by the HVS during the first week of March following the rejection of the project by His Honour Judge Michael Kay QC was tempered by the thought: where do we go from here, to preserve as much as we can of the environment, and help the disappointed fishermen?

The arguments and comments rehearsed so many times are detailed and seemingly insoluble, beyond the obvious need to agree a location for fishermen away from the jetty proposed for expansion. Landowners adjacent to the T-junction - where incoming tides are swift - do not appear enthusiastic.

Perhaps the divisions may be healed by adopting components of the model that the “official” management of the nearby Fal estuary presents.

There are a range of agencies charged with preserving the natural and built environment, while allowing industry to thrive. One of them is the FHC, the Falmouth Harbour Commissioners.

Mark Sansom, Harbourmaster at Falmouth, comments:

“Much of the Fal Estuary falls under the jurisdiction of statutory
harbour authorities.

“Within these areas there is a clear management and
regulatory framework governing the majority of activities undertaken.

“The harbour authorities involved have a clear mandate to engage with
their stakeholders, and manage activities appropriately.

“The management of fisheries within these areas is undertaken by a number of different organisations - such as Cornwall Sea Fisheries and the Environment Agency - who will also have authority to act outside of the harbour authority
jurisdiction.

“The harmonisation of the uses of the marine environment
is a key objective of the proposed Marine Bill."

So the protagonists in and around Helford have a void to negotiate – a void comprising a lack of a will to compromise, and, it appears, the lack of a viable alternative location for the jetty where fishermen expected, until the Court decision of 5 March, to be able to land their catches unencumbered by the regulations and charges that apply in Falmouth harbour.

Contemporary Art Society, London - into 2009

Into 2009 with Paul Hobson

Gossip and dinner-table talk about contemporary art in the UK was certainly hot in 2007 and 2008, with the successes of Damien Hirst, Banksy, Gormley and the Jay Jopling/Sam Taylor-Wood axis the leading contenders for Topic of the Year among collectors and wanabee collectors.

With young professionals and their more established elders keen to demonstrate their metropolitan credentials - by adorning their apartments with art and their conversation with allusions to de-constructivism, irony, minimalism and re-enactment – the UK’s contemporary art prospered, given a favourable economic climate and an acceptance that, 20 years ago, would have been unimaginable.

With 2007’s Frieze art fair – held in London every autumn, with galleries from 25 countries representing 1,000 artists – drawing yet another record number of visitors, the prospects for the Contemporary Art Society’s Art Futures event in March 2008 were high – and delivered. But the new director of the CAS, Paul Hobson – a former Head of Strategy at London’s Serpentine Gallery – is anxious that this fashionable appetite for contemporary art should be married to a serious engagement with the work.

There is a sense in the art world, certainly among artists, that at a time when contemporary art is extremely fashionable, the brand value of contemporary art has very little to do with engaging with the work in any meaningful way. The Contemporary Art Society (CAS, www.contempart.org.uk ) has, for almost a century and long before contemporary art was de rigueur, provided people interested in buying contemporary art with expert insight into artists and their practice.

“We spread the word that art is worth investigating more deeply and that this is the real investment in art and one that pays dividends! Art Futures, the annual exhibition, showcases many emerging artists to the market, while replenishing our voluntary-status coffers so we can buy and give work to public collections across the UK,” comments Hobson.

“This is an exciting time for the CAS with a rejuvenated Board, an energetic and expert team and a rapidly growing membership with a serious appetite and interest in contemporary art” comments Hobson, who became the CAS’ new director in summer 2007.

The co-author last year of a book with a typically challenging title - Life is more important than art (Ostrich Publications, London) - which comprises a series of interviews with radical international artists, among them Stuart Brisley and David Medalla - Hobson does not shrink from posing an awkward question if he thinks it will advance an idea or discussion - yet he does so lightly and diplomatically. Uppermost in his mind is the mission of the CAS to swell the collections of contemporary art among the UK’s regional public galleries - all of them strapped for cash to the point of distraction - and increase the CAS’ young collectors’ group, called Blood.

`Our work with new collectors through schemes like Blood combines buzzy social events with a serious engagement with art and generates the funds which enable us to give contemporary art to museums across the UK, where they can be enjoyed by audiences nationally. Tragically, there is a crisis of chronic under-investment in public collections of contemporary art at a time when there has been no greater appetite amongst the general public to join the debate.’

“The CAS has been an authoritative and visionary agent in bringing contemporary art to audiences nationally for almost a century, being ahead of the curve in identifying new artists who have gone on to establish international careers, and leaving a legacy for future generations through public collections.

“Because of our long history, we are very aware that this exciting moment when contemporary art is so fashionable, and offers so many opportunities to artists and audiences, is married to a real engagement with artistic concerns.

“Contemporary art isn’t easy, nor should anyone expect it to be. Gallery experiences tend to discourage audiences from simply looking at the work and searching for an interior response. This has to be the starting point.

“At the CAS we are trying to mediate, to help the voice of the artist assert itself; you could say this is the “currency of the slow-burn”, helping the onlooker’s own critical autonomy - in the end, a far more valuable asset than any purchase and which benefits the artist, who is central to all our concerns.”

Ends.

“Reading the Runes”

So when will the next property boom occur? Not in 2009 — but might the green shoots of recovery be seen in early 2010, with full flowering witnessed a year later, just before the London Olympics?

I recall producing a specialist, one-off property-focused magazine in 1992 called Recovery. Mooted in 1991-2, it was published two years too soon! Truly, the 1990-1995 property recessions longevity was daunting, and debilitating. However, this "scribbler" had the pleasure of sparring with broadcaster Mary Nightingale in 1994 when she claimed that good times would only return when house prices recovered: I suggested that the Clinton administration at the time was the first government in the world to announce a fall in unemployment, and that job creation presaged a far wider recovery than that of house prices.

Students of recession might like to turn to The Property Boom, written by former Sunday Times journalist Oliver Marriott in 1967, revised by him in 1989 (first published by Hamish Hamilton, London). Its line up of entrepreneurs includes Harry Hyams, who developed Tottenham Court Road's Centre Point; a shrewd former estate agent, he purchased — in the last week of October 1954 — offices in Mayfair's Grafton Street, one week before government restrictions on development were lifted: the date marks the start of the post-war boom.

Also included is Charles Clore, the developer who followed a largely anti-herd "contrarian" approach, buying when others turned away. Like the former Navy rating Donald Gosling — who bought bomb sites and added them to his fledgling NCP car park portfolio — Clore claims he foresaw the boom. The surge for London offices was impressive: offices accounted for 10% of London buildings in 1945, and a whopping 72% in 1966.

True, there had been a collapse, or pause, in the property market in 1958 — but with affluence building a head of steam during the Beatles/Kings Road/World Cup 1966 era, London was set fair for growth until the secondary banking/oil price spikes of 1973 - made worse by Harold Wilson's very left-wing government, and the subsequent Tory administration's inability to get coal to power stations — led to economic stagnation via inflation, the introduction of pence in place of pennies (goodbye, shillings!) and the rise in quality and affordability of Japanese and German goods.

Marriott's book requires someone of the stature of Paul Finch or John Waples to re-write Property Boom; ideally, it should hit the streets just as British athletes take their place on 2012's starting blocks in east London.

The impact of sovereign wealth funds

The impact the emergence of sovereign-wealth funds
is exercising on current international
residential and commercial property investment

Ask any Western property developer what he or she thinks of state intervention and the answer will probably be “not much.”

Known for their independence of thought, enthusiasm and robust approach to business and the task of constructing new premises for residential and commercial clients, developers are generally cut from sturdy cloth, ready to ride the storm clouds in search of their not inconsiderable financial targets.

These entrepreneurs, from day one, expect to carve their own way, free of state interference.

Eager to make the most in the UK of the financial resources that flowed in abundance in the UK during Mrs Thatcher’s privatisations and financial de-restrictions of the mid-198os, many of the current wave of developers - both in the UK, and in Europe - came to the fore in generally benign macro-economic circumstances.

How ironic, then, that in 2008’s severe global downturn, they find that it is government money - sourced in the US, Europe, Russia, the Middle and Far East - that currently provides a lifeline while investment values fall and the threat of unemployment empties the offices, shops, industrial units and residential homes in which they have invested and derive their income.

As a sophisticated, dynamic and yet relatively safe investment, far from the clutches of the state, property was never meant to be like this. As an asset class, its reputation used to be formidable, the inspiration of tycoons and their contracted dealmakers.

In Europe and the US, financial commentators and analysts focusing on the property sector’s prospects have come full-circle: they are unimpressed by the outlook for 2009; some, even, are calling for a re-working of 1944’s Bretton Wood Agreement (between President Roosvelt, Churchill and their allies, the Soviet states), whereby the International Monetary Fund (IMF) was created, state money is used to prime entrepreneurs and those business capable of stimulating employment and the macro-economies of trade throughout the developed world, and currencies stay as stable as possible – often linked to the value of gold.

A term that would have been unfamiliar to the two world leaders in 1944 would have been sovereign wealth fund, or SWF.

There was no indication in the mid-1940s that the exploitation of oil, in any country, would start to play such an important role within 10 years of Bretton Wood’s signing; but that is what occurred, with SWFs slowly emerging in the mid-1950s, firstly in Kuwait following the Anglo-Kuwait creation of the Kuwait Investment Board, reaching a crescendo of significance in the mid-2000s. Singapore followed with its own SWF shortly after Kuwait.

Might Roosevelt ever have anticipated the following from an official of the US government: the call by US Deputy Treasury Secretary Robert Kimmitt on oil-rich Gulf States, at the end of October 2008, to continue investing in the United States, to help restore financial stability.


And more recently, in November 2008, Gordon Brown, the UK Prime Minister, visited Saudi Arabia in talks to persuade Saudi Arabia and Qatar to invest more capital in the IMF, to create a larger pool of money that western, stricken companies/economies can draw upon.”We're looking for sovereign wealth funds to continue their more than five-decade track record of investing on sound commercial bases,” Kimmitt said during a visit to the United Arab Emirates, his second stop on a five-nation tour of Gulf countries and Iraq this autumn. ”If they do that - both in the US and elsewhere - I think this is how they can best contribute to the global economy,” he said.

Kimmitt, who travelled to the UAE from Saudi Arabia, said he was meeting government officials and investors in the region.
Unlike previous economic downturns that have come and gone, it is the stagnation in liquidity which has, via the world’s fearsome credit crunch, led to the falls in real estate values across the board to drop; highly-leveraged property companies have been squeezed while the values of commodities, in 2007, to mid-2008, have risen sharply. According to international property consultant CBRE, capital value for all UK property values in the UK have dropped by an average of 14.9% across all sectors as demand, especially for commercial property, has fallen.

It is these factors that have created an environment whereby cash is king: entities with high liquidity have been able to take advantage real estate opportunities - predominantly in the western world - where values have taken the sharpest plunge.


At the moment there is no other financial entity with as much liquidity - and the hunger to invest in real estate - as SWFs. Officially it is estimated that SWFs hold as much as $3 trillion-worth of assets and - although they are not as large as pension funds - they are set to increase their worth to around $12 trillion by 2012.

SWFs are state-owned investment vehicles that invest their surpluses in overseas markets. Not all SWFs are the same: each has its own agenda and strategy.

Some simply seek higher returns on their surplus capital, some seek to restructure and encourage domestic industries.

70% of SWFs derive their funds from oil and gas - therefore funds in Russia and the Persian Gulf (which is home to the largest SWF, called ADIA) have a vested interest in stabilisation funds that counter the volatility of sharp moves in energy prices. SWFs’ reliance on commodities also makes them seek to create long-term wealth and reduce their dependence on energy prices; this is especially evident in Dubai.

Other SWFs - such as those in China and Singapore, which are non-commodity-based - accumulate their wealth from trade surplus and foreign exchange reserves.

However one thing that all SWFs have in common is that they all de-leveraged their balance sheets during the early to mid-2000 global economic boom; as a result, these countries now have enormous buying power.

Hedging characteristic of real estate
Real estate has long been a hedging tool used by pension and insurance fund managers to help diversify portfolios; due to the characteristics of real estate - a long-term investment that can produce a steady income stream and capital growth; it is no wonder SWFs want to increase their exposure to this asset class.

With substantial SWF growth expected in the next four years it is neither sensible nor advantageous for SWFs to only invest in safe, fixed assets and securities. The Norwegian state fund has stated that it is receiving money at a rate of $1billion a week; ADIA, in comparison, accrues $1billion a day. With an income like that it makes sense for SWFs to diversify and increase their investment in uncorrelated asset classes such as real estate.

With China Investment Corporation (CIC)’s loss of around $1billion following its investment in US private equity giant Blackstone – plus the write-off of billons of dollars by Middle East investors who invested in American banks that fell victim to 2008’s credit crunch – SWF’s sentiment towards the US-Europe financial sector has changed: according to Monitor Group research, during Q2 2008, investment shifted away from financial services: in-fact half of deals completed by SWFs by value in Q2 were in real estate. Real estate was the asset class that witnessed the largest number of deals (12) during this period, with investment from SWFs totaling $13.7 billion.

Persian Gulf SWFs in particular have a huge appetite for global real estate; over the years they have compiled an impressive and prestigious global real estate portfolio preferring to invest in trophy and iconic real estate.

One of the largest SWFs - the Abu Dhabi Investment Authority (ADIA), which has an estimated worth of $875billion - in June 2008 took a 90% share in New York’s iconic Chrysler building, the second trophy building in New York City acquired using money from Gulf.

New York’s General Motors building, the most valuable building in the United States, was sold to a consortium of investors which included the Kuwait and Qatar investment authorities (the KIA, and QIA) for $2.8billion.

SWFs have been able to acquire much US real estate due to the weakness of the dollar and fears of falling office rents.

In Australia, ADIA also expanded its portfolio by investing $280 million in Lend Lease's new office-tower project, Darling Walk, on the edge of Sydney’s CBD.

In the UK, oil-rich SWFs from the Middle East spent £8.9billion on a cross-section of the real estate sector in 2007, which included office, retail and industrial property.

The UK has long been recognised as a politically stable and secure investment environment, delivering relatively stable returns from real estate investment. Subsequently, the KIA and the QIA have been attracted to the island shores.

In June 2008 the Kuwait Investment Authority’s property investment and development company - called St Martins - acquired the Willis Building in the City of London, for £400 million. Income stream and capital growth in the medium and long-term is guaranteed, complementing St Martin’s portfolio which also consists of London Bridge City and, in Turkey, the $515.5million, 420,000 sq metre Istanbul Cevahir, one of the largest retail developments in Europe, which it purchased in October 2007 from the Cevahir group.

In the UK foreign investors preferably work in JV in order to acquire and develop real estate. Partnering with host institutions, developers and landowners.

UK’s industrial warehouse market


Economic Zone World (EZW), part of the Dubai World SWF - which has a great deal of influence over the UK warehouse market – confirmed in Autumn 2008 it would pay £300m for Gazeley, Asda-WalMart’s development subsidiary, in March 2008. By acquiring Gazeley, EZW-Dubai World is able to expand much more quickly and increase its competitiveness.

Additionally under EZW, Gazeley will be able to restructure its warehouse development business model into one that resembles what has occurred in the US – i.e.: a ProLogis-style fund - into which it will place its investment properties.

The merger seems to have boosted Gazeley’s confidence in the UK; currently it has 2.5m sq ft under construction.

The effect on the UK of this rapid investment is that, at the time of writing, morale among property professionals has improved.

Oil and SWFs
Companies and funds based in the Persian Gulf and Russia have been able to acquire such iconic global real estate landmarks due to the price of oil: the price - which grew so much in 2006-2008 - has played a significant part in the strength of SWFs based in the Middle East and Russia. As oil prices soared to highs of $148 per barrel in mid-2008 a dynamic where emerging markets could reap massive profits from their natural resources was created.

While western economies and China have found in 2007 and 2008 that they have had to pay more for their energy, SWFs used this extra surplus margin to invest back into the market and acquire large stakes in foreign real estate and other assets.

In November 2008, however, oil prices dropped by more than 50%, to around $60 per barrel; this has - for the time being - brought a slowdown to the dynamic of enormous liquidity in the emerging markets versus the credit crunch in the West.

If oil prices continue to languish, it could slow cash inflows to oil-based SWFs. Iran's central bank warned in late 2008 that if oil prices fall under $60 per barrel, the country's oil-dependent economy could struggle to survive the world financial crisis. The same is evident for the majority of other commodity dependant SWFs.



Real estate in the UK and US

As a result of 2008’s intervention by SWFs, UK and US real estate - for the time being - has been able to maintain some kind of positive performance; there are still investors looking for, and acting upon, opportunities. This would not have been possible without SWF intervention.

Just as banks in the West have been shored-up by governments, SWFs have been able to shore-up the weakening real estate industry, albeit at the expense of a relatively significant stake in their original ownership; this has caused some controversy among those who feel that investment form a political state is unacceptable in a commercial market, permitting too much potential state influence in markets that would otherwise operate under objective market conditions. Currently the lack of transparency is also a concern.

Although SWFs are not a relatively new phenomenon their impact on the global markets is, nonetheless there is still scope to shape the ways in which they evolve. Management skills will no doubt improve. SWFs have not acted out of good practice since the conception of the first SWF in 1953. In-fact theoretically assumed geopolitical implications are the real sources of scepticism when you consider that in the wider scope SWFs are only 2% of the worlds $165trillion – worth of traded securities.

Abu Dhabi Investment Authority (ADIA) has started plans to enhance disclosure of its operations in line with an agreement with the IMF and the Norwegian State Pension fund is already practicing transparency.

There is no escaping the fact that forms of state ownership will become common place among companies, therefore it makes more sense to find ways of regulating this trend instead of ridiculing it.

The emergence of sovereign-wealth funds created by governments in the Middle East and Asia may well replace their forebears in helping to get the UK, European and US market back on its feet again.

The growth of Sovereign Wealth Funds (SWFs) is one of the most notable characteristics of the current wave of globalisation.

The Norwegian fund – called the Government Pension Fund (GPF) - recently announced that it is looking to invest around $13 billion into property – to gladden every property professional.

Back in London, Qatari Diar, an investment company of the Qatari government - wholly-owned by the Qatar Investment Authority - is another SWF that has been busy in the UK market. It has been involved in such prestigious London real estate as the Shard and Pinnacle Tower and in acquiring the highly publicised Chelsea Barracks site, an acquisition which would not have been possible without oil money.

In April 2007 Chelsea Barracks, a 5.2 hectare site, was bought from the Ministry of Defense by a consortium consisting of Qatari Diar and the CPC Group for a reported £959 million at the height of the property boom; it was initially put up for sale for £250 million.

As a result of the acquisition the site is currently owned by a company designated as Project Blue, a Guernsey-listed entity which is two-thirds owned by Qatari Diar and a third by the Candy & Candy’s headed CPC Group.

Under the arranged joint venture partnership, Qatari Diar is funding the development, while the CPC Group is responsible for management and design aspects.


However recent speculation has suggested that the Candy brothers are in negotiations to sell their share of Chelsea Barracks to Qatar Diar, because of the UK’s currently unfavourable economic conditions. It is unlikely that the development’s apartments will obtain the average £10 million each that was pencilled-in when the site was acquired.

Further west from Chelsea, real estate commentators have noted that the Abu Dhabi SWF, Mubadala, has funded its “green” energy subsidiary Masdar to acquire a 20% stake in a windfarm planned for the Thames Estuary in 2010; initially there will be 175 turbines – some of them no doubt sourced from the Finnish turbine manufacturer that Masdar co-acquired in 2007.

QIA is also involved in the PCP Capital Partners, a Middle East consortium that is currently in talks to purchase the property management, outsourcing company Trillium from Land Securities for around £1 billion.
Trillium manages more than 2,000 British properties, which include schools and hospitals on behalf of the Government, covering 50m sq ft. Acquiring Trillium would give QIA immediate access to secure long-term real estate assets under an already established and experienced company.
Conclusion

The ideal SWF model for investment into UK real estate, it can be argued, is to be found in joint ventures (JVs), whereby SWFs partner with financial institutions, developers and landowners.

At Chelsea Barracks, for example, a SWF has been able to supply cash to support the developer: SWFs can initiate real estate projects - in both the UK, and beyond - that would defeat rival, non-SWF entities.

SWFs are in an enviable position: currently with their “firepower” they can acquire real estate assets at below market value and use their partners to contribute to the project with expertise and local knowledge. In doing so, SWFs can successfully - and very profitably - build themselves out of the current downturn.

Notes:

A sovereign wealth fund (SWF) is a state-owned investment fund composed of financial assets such as stocks, bonds, property, precious metals or other financial instruments.

Sovereign wealth funds gained worldwide exposure in 2008 by investing in several Wall Street financial firms, including Citigroup, Morgan Stanley, and Merrill Lynch.

SWF’s were set up for numerous purposes, which include - and now control - around 2% of the world’s $165trillion-worth of traded securities

SWFs are not exploiting current US or European downturns. They have a balanced focus, which investigates opportunities in potentially lucrative emerging markets in the Middle East and Asia: investments in these regions accounted for 68 per cent of the total value of all publicly-traded deals in this mid-2000s.

Persian Gulf SWF’s have diversified global investment geographically, channelling liquidity into real estate and tourism projects in Morocco, Tunisia and South and East Asia.

However, although SWF investment in real estate equities will grow, the sector is not large enough to absorb much of their new investment in real estate.

From the Thames Estuary to the sands of Abu Dhabi,

With its recently-announced acquisition of a 20 per cent stake in the River Thames’ London Array wind farm project, Abu Dhabi company Mubadala - financed by Abu Dhabi’s $700 billion sovereign wealth fund - obviously hit upon a great name for its recently-created “green” technology subsidiary Masdar: the word is Arab for “the source”.
Sited 12 miles into the North Sea off the south Essex coast, London Array is jointly owned by Masdar, German power company E.on and Denmark’s DONGenergy.
With the UK government’s blessing, London Array aims to produce 1,000 megawatts of energy in the near future - perhaps even by 2012 - from about 340 turbines. This cascade of 1,000 megawatts will power the energy needs of 25% of London’s homes.
London Array received planning permission for its offshore work in December 2006 - and the UK government, in August 2008, supported the planning inspector’s recommendation for permission to be given for the construction of an onshore substation.
Further east, away from the modest temperatures of the North Sea, Masdar's plans for Masdar City - a metropolis of 50,000 residents and 1,500 businesses located 12 miles south of the capital city called Abu Dhabi - are already becoming reality, with construction underway.

Set to be the world's first carbon-neutral, zero-waste city, premises for light industry, health and education - along with homes for residents - will be "fed and watered" by technology that is as "green" as possible, providing the Abu Dhabi emirate and capital with a brand-new international technopole that burnishes the state’s reputation as a forward-thinker, implementer, and responsible investor. Completion is scheduled for 2015.

With oil revenues currently well off their 2008 peak and languishing at around $50 per barrel, Masdar's “green real estate” timing is good, offering Abu Dhabi a diversified income stream, away from the usual indigenous oil/gas industries.

"For us, the ongoing construction of Masdar City represents a wonderful opportunity,” says Sultan al-Jaber, (photo available) CEO at Abu Dhabi Future Energy Company (ADFEC), established to mastermind the US$15 billion Masdar/Mubadala initiative.

“We are fully aware of our position in the world’s energy market, and we have plenty of energy expertise to deploy on something entirely new, something the world has never seen before.

"Our aim is not to replace oil and gas revenues totally, but to help extend their viability by finding alternative revenue streams. The creation of the new city represents an income-producing asset, deriving revenue just as the ownership of a town, village or business district does anywhere else in the world," he added.

The Masdar initiative also comprises the Masdar Clean Tech Fund: involving the participation of Consensus Business Group, Credit Suisse and Siemens, this central fund has $250 million with which to build a portfolio of clean technology funds, co-investments and joint venture initiatives; all are aimed at helping to provide energy security and sustainable human-resource development through the use of renewable energies.

The Clean Tech Fund deployed most of its capital in 2007, 12 months ahead of schedule; strategic equity stakes have been taken in companies such as Segway, Halosource, Europlasma, Sulfurcell, Heliovolt, SIC Processing and EnerTech Capital.

Architects’ masterplan

Masdar City’s creators have linked with London-based architects Foster and Partners in planning the new metropolis, which will extend to 6 square kilometres. There will be a PRT (Personal Rapid Transit) comprising Masdar-designed electric vehicles for residents, to make the city entirely car-free; it is estimated there will be a total of 2,500 PRT vehicles, with daily use expected to involve about 150,000 trips.

Trucks will also be eliminated from Masdar City, thanks to its revolutionary 5,000-trips-per-day MRT, Material Road Transit.

The source of the city’s energy will originate from photo-voltaic panels, with cooling provided via concentrated solar power.

Water will come from a solar-powered desalination plant; crops and shade-giving palms lining every street will be irrigated with waste (“grey”) water.

In addition to the construction of the new city, Masdar/Mubadala is investing in innovative technologies – and the companies developing them – with the goal of bringing the next generation of sustainable solutions to market: the initiative is directly interested in projects in all areas of renewable energy and sustainability, with an initial focus on the following sectors: concentrating-solar-power (CSP), solar-photovoltaic (PV), wind-energy, waste-to-energy and the solar-power cooling.

A range of wind and waste-to-energy projects will be operational in Masdar City by 2010.

Institutes in Abu Dhabi and Massachusetts

The Masdar Institute of Science and Technology (MIST), meanwhile, is the region’s first graduate-level, research-driven scientific institution focused on education and research in energy and sustainability; the institution has been developed in co-operation with the Massachusetts Institute of Technology (MIT).

MIST lies at the core of Masdar’s effort to develop the scientific and human talent required for the new clean-technology sector to thrive.

Beginning in September 2009, MIST will recruit emiratis and others from the region, and beyond. Full-time, two-year master of science programmes will be offered in: engineering systems and management, IT, materials science and engineering, mechanical engineering, and water and environment sciences.

MIST also encompasses the Masdar Research Network (MRN), a network of universities across the world that are conducting advanced research in energy and sustainability technologies.

MRN partners include:
· Columbia University, USA
· Imperial College of London, UK
· RWTH Aachen University, Germany
· University of Waterloo, Canada
· Tokyo Institute of Technology, Japan
· The German Aerospace Center (DLR)
· Ciemat: Energy Research Center, Spain.


And as the icing on the cake, Abu Dhabi - with a population of less than 1 million - will host the inaugural World Future Energy Summit (WFES) in mid-January 2009, held under the patronage of the state’s HH General Sheikh Mohammed bin Zayed Al Nahyan.

It may require less than 90 minutes to drive from one end of Abu Dhabi to another, but its world-standing as the cradle for 21st century innovations in clean energy production is about to go through the roof.