Goldman Sachs Said to Have Lost $1.8 Billion U.S. Property Deal

Goldman Sachs Group Inc. was the original winner of Alectas U.S. real estate sale before the transaction fell apart amid a disagreement over terms, leading Blackstone Group LP to prevail with a $1.8 billion deal, said people with knowledge of the matter.

Goldman Sachs was initially awarded the U.S. and U.K. properties being sold by the Swedish pension manager and given a short amount of time to do additional research on the assets. During that period of about a week, a dispute arose that prompted Alecta to agree to sell the U.S. buildings to Blackstone instead, said the people, who asked not to be named because the transaction is private.

Goldman Sachs will proceed with the purchase of Alectas U.K. assets, according to the people. The U.K. properties are valued at about $450 million, said the people.

Representatives of Goldman Sachs, Alecta and Blackstone declined to comment. Jones Lang LaSalle Inc., the broker on the deal, also declined to comment.

The U.S. portfolio includes 22 properties across the country, mainly retail and office buildings. Stockholm-based Alecta hired Jones Lang in April to sell the properties, saying at the time that the assets had performed well but were an organizational anomaly and strong real estate markets made it a good time to sell.

Signs of slowing in the U.S. commercial real estate market after a six-year boom may have contributed to a disagreement over the price of the assets, one of the people with knowledge of the auction process said.

Property Expansion

The bid by Goldman Sachs comes as the bank has been rebuilding its real estate business since disbanding its Whitehall property funds, which were hit hard during the financial crisis. Top executives of Whitehall left the firm and Goldman Sachs shifted its real estate focus to lending from buying properties.

In 2010, the company began to expand in core real estate: low-risk, stable, income-producing properties. In 2013, Goldman Sachs teamed with U.S. apartment developer and manager Greystar to buy a group of residential complexes across the country for about $1.5 billion, later bringing in Canadian pension fund Ivanhoe Cambridge as a third partner.

Two years ago, Goldman Sachs completed fundraising for its second real estate credit pool at $4.2 billion. The firm at the time said it would be opportunistic in investments and would look in the U.S. and Europe.

Blackstone, the biggest private equity investor in real estate, is now set to acquire properties that include high-quality shopping centers in California, two retail buildings housing Sephora and Disney stores on Chicagos Magnificent Mile and an office building in Washington that was featured in President Barack Obamas push to make commercial buildings more energy-efficient.

Alecta expects to complete the sale by the end of the year or in the first quarter of 2017, said Per Frennberg, chief investment officer of Alecta. He declined to comment on the auction process, citing confidentiality.

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Controversial British designer behind planned $150m New York sculpture

Thomas Heatherwick, whose planned Garden bridge in London is under investigation, has designed audacious Vessel sculpture for public plaza

A controversial British designer is behind an audacious $150m public art structure nicknamed the Stairway to Nowhere planned for a new multi-billion dollar commercial development on New York Citys west side.

Thomas Heatherwicks design of a giant, free-standing collection of multi-level staircases that will give the public fresh views of the city was unveiled in New York on Wednesday and is currently under construction in Italy.

But the choice of Heatherwick for the project is likely to raise eyebrows in Britain, since he is the designer behind the planned Garden bridge over the Thames in London that is under investigation for its use of public money and projections that it would need a taxpayer bailout once operational.

However, the private company behind the New York project said on Thursday, that it was not concerned that there will be cost overruns on a large scale for the staircase piece, even though the cost has already doubled from the original estimate of $75m, according to the New York Times.

Heatherwicks new piece is officially called Vessel and will incorporate 2,500 stairs in a bold, basket-shaped structure standing within a new plaza with trees, paths and flowerbeds, surrounded by skyscrapers.

Thomas Heatherwick, the designer of the Vessel sculpture, visits Hudson Yards in New York on Wednesday. Photograph: Mark Lennihan/AP

The new landmark is intended to be a stunning spectacle of public art while also being entirely accessible to the public, including an elevator to the top, which is expected to be 15 storeys high.

Vessel will be positioned close to the Hudson river on the west side of Manhattan in Hudson Yards, a fast-developing former industrial semi-wasteland where new office buildings and luxury apartment blocks are now springing up.

Hudson Yards surrounds the uptown end of the enormously popular High Line park that was built on a disused elevated railway line and, since opening in 2009, has held a magnetic attraction for New Yorkers and tourists alike to the neglected area north of the trendy Meatpacking District and Chelsea neighborhoods.

Renderings of Heatherwicks Vessel were revealed by private US developer Related Companies and its founder, billionaire Stephen Ross, who is behind the Hudson Yards development and is backing the art project.

Londons proposed Garden bridge, a pedestrian link to be planted with flowers and greenery and span the river from Temple to the South Bank, was proposed by Heatherwick and others and became a pet project of Boris Johnson when he was the London mayor.

But it was announced in June that the National Audit Office is investigating the use of public funds to support the bridge project.

And in July, a London-based consulting firm predicted that official estimates of future donations to allow the bridge to operate at a profit were overly optimistic and the business plan for the project was exceptionally weak.

London mayor Sadiq Khan halted some of the existing spending on the project, ahead of a review.

Heatherwick had previously attracted both acclaim and controversy for his Olympic flame at the 2012 games in London.

The spectacular cauldron of copper petals that rose up to form a flaming flower at the climax of the opening ceremony was hailed as one of the most original in the history of the Olympics.

But a New York design firm, Atopia, claimed that they had submitted a remarkably similar idea to games organisers years before, and sued in 2013.

The organisers of the London Olympics settled out of court with Atopia in 2014, although there was no admission of liability and Heatherwick maintained that the design process was categorically that of he and his team from start to finish.

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Milk, Not Plastic, Will Protect Food in the Future

Much of the plastic packaging we see in the grocery store can be recycled, from egg containers, to milk jugs, to butter tubs. But what about that thin plastic film stretched around wedges of manchego in the cheese bin or the 16-ounce rib-eye in the chiller case?

It turns out that kind of plastic is tougher to recycle and might even be adding harmful chemicals to your food. Oh, and its not even good at doing what its supposed to do: prevent food spoilage. 

Luckily, researchers are investigating alternative forms of food packagingthe kind you can eat.

U.S. Department of Agriculture researchers have discovered that a milk protein called casein can be used to develop an edible, biodegradable packaging film. The casein-based film is up to 500 times better than plastic at keeping oxygen away from food because proteins form a tighter network when they polymerize, the researchers found. Its also more effective than current edible packaging materials made from starch and protects food products that are sensitive to light. 

Everything is in smaller and smaller packaging, which is great for grabbing for lunch, for school, but then it generates so much waste, said Laetitia Bonnaillie, a USDA researcher who co-led the casein packaging research. Edible packaging can be great for that.

Source: American Chemical Society

To produce a more practical packaging material, the team added glycerol and citrus pectin to the casein film, which is made by spreading a mixture of water and commercially available casein powder. Glycerol made the protein film softer, and citrus pectin added more structure to the film, allowing it to resist humidity and high temperatures better. Bonnaillie said the additives used by researchers also distinguish their packaging, because pectin is good for us.

Flavorings, vitamins, and other additives can be used to make the packaging, and the food it surrounds, tastier and more nutritious.

These films will be more health-enhancing than starches, Bonnaillie said.

One of the potential applications could be as a dissolving packet of dried coffee or soup. Instead of tearing the top off and pouring it out, you just drop the whole thing in hot water, and it dissolves, adding protein to boot. Another is as single-serve food wrappers  that use large amounts of plastic for such products as cheese sticks.

I use these a lot, and my thought every time is theres almost more plastic than cheese, Bonnaillie said.

Because the casein film dissolves in water, one of the main drawbacks to single-serve pouches is that they would need larger, nondissolving plastic or cardboard containers to keep them clean and dry. Bonnaillie said many packages already have an outer layer, however, so in a multi-layer system with secondary packaging, casein would still help the environment.

Casein in liquid form can serve as packaging and food. It can be sprayed onto cereal flakes and bars. Many cereals currently maintain their crunch because of a sugar coating but could achieve the same goal without sugar using the milk protein.

It could even be used to line pizza boxes. While the U.S. Food and Drug Administration banned perfluorinated chemicals, which used to coat the cardboard surrounding your pepperoni, sausage, and extra cheese pie, a sprayed-on casein coating could serve as an alternative product to prevent grease and stains.

Unless companies try finding their own applications of the casein packaging, it will be many years before the USDA researchers can make it available, Bonnaillie said. She said they are at the very beginning of a process of finding applications for a product that has the potential to be so much better than plastic.

Watch Next: This Lab Is Solving Our Plastics Problem 

This Lab Is Solving Our Plastics Problem

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Docklands’ Lincoln Plaza luxury flats win Carbuncle Cup

Image copyright Ike Ijeh

A 31-storey luxury residential tower block in London’s Docklands called “jarring, unsettling and shambolic” by critics has won the 2016 Carbuncle Cup.

The award handed out by Building Design magazine for a development judged to be the UK’s worst designed was given to Lincoln Plaza near Canary Wharf.

The building was a “brain-numbing jumble of discordant shapes, patterns, materials and colours”, it said.

A Poole church extension and Sheffield University block made the shortlist.

Last year’s Carbuncle Cup went to the City of London skyscraper nicknamed the Walkie Talkie.


Building Design established the award in 2006 as a “light-hearted way of drawing attention to a serious problem – bad architecture blighting the country’s towns and cities”.

Nominations for the Carbuncle Cup come from readers of the magazine and a shortlist is drawn up by a jury.

‘Swathe of mediocrity’

Lincoln Plaza was designed by London-based BUJ Architects for Galliard Homes and features two residential towers, a hotel and a standalone drum-shaped building.

Remaining three-bedroom flats in the building are on sale at 795,000, but Building Design editor Thomas Lane described it as “the worst building amongst a swathe of mediocrity” in the South Quay area of the Docklands.

“There is a pressing need for more homes in London and further afield. Lincoln Plaza is the type of project that gives high-rise housing a bad name, making it more difficult to persuade communities to accept new housing,” the jury added.

Galliard Homes said its “scheme sold out to buyers, so clearly the project is liked by the purchasers”.

The developers added: “Architectural design is art, and like all art, a matter of personal tastes. Each project the company delivers is bespoke and distinctive and the company has built a strong reputation for rapidly selling out.”

Image copyright Building Design
Image caption Poole Methodist Church extension was likened to an “unimaginative grey box”

The other buildings on the Carbuncle Cup shortlist were:

  • Saffron Square, a residential development in Croydon, south London
  • The Diamond, an engineering block at the University of Sheffield
  • One Smithfield, Stoke-on-Trent Council’s new offices
  • Poole Methodist Church extension
  • 5 Broadgate, Swiss bank UBS’s HQ in the City of London

Building Design said Saffron Square has been described as having a “car crash of a facade”.

The Diamond at Sheffield University, said the jury, had an “unsettling similarity to a hydroelectric plant, while Stoke-on-Trent’s Council offices were likened to an “aesthetic mutation between the nostalgic 1980s brain games of Connect 4 and Blockbusters”.

The Poole Methodist Church extension was compared to an “unimaginative grey box”. Building Design said it “may be small, but the sheer scale of its deficiencies reverberate far and wide across the grim spectrum of planning failure and architectural blight”.

5 Broadgate attracted the most comments from the magazine’s readers during the nomination process, being likened to a “mute steel fortress” and “a flak tower that gives nothing back to the city”.

Image copyright Thomas Lane
Image caption The Saffron Square development in Croydon has “a car crash of a facade”, the magazine’s readers said
Image copyright Thomas Lane
Image caption The nomination for UBS’s new HQ said it was “a flak tower that gives nothing back to the city”

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The Global Impact Of Air Conditioning: Big And Getting Bigger

The Conversation

With a heat wave pushing the heat index well above 100 degrees Fahrenheit (38 Celsius) through much of the U.S., most of us are happy to stay indoors and crank the air conditioning. And if you think its hot here, try 124F in India. Globally, 2016 is poised to be another record-breaking year for average temperatures. This means more air conditioning. Much more.

In a paper published in the Proceedings of the National Academy of Science (PNAS), Paul Gertler and I examine the enormous global potential for air conditioning. As incomes rise around the world and global temperatures go up, people are buying air conditioners at alarming rates. In China, for example, sales of air conditioners have nearly doubled over the last five years. Each year now more than 60 million air conditioners are sold in China, more than eight times as many as are sold annually in the United States.


A heat dome arrives in the U.S. NOAA Forecast Daily Maximum Heat Index

This is mostly great news. People are getting richer, and air conditioning brings great relief on hot and humid days. However, air conditioning also uses vast amounts of electricity. A typical room air conditioner, for example, uses 10-20 times as much electricity as a ceiling fan.

Meeting this increased demand for electricity will require billions of dollars of infrastructure investments and result in billions of tons of increased carbon dioxide emissions. A new study by Lawrence Berkeley Lab also points out that more ACs means more refrigerants that are potent greenhouse gases.

Evidence from Mexico

To get an idea of the global impact of higher air conditioner use, we looked at Mexico, a country with highly varied climate ranging from hot and humid tropical to arid deserts to high-altitude plateaus. Average year-round temperatures range from the high 50s Fahrenheit in the high-altitude plateaus to low 80s in the Yucatan Peninsula.


Graphic shows the range of average temperatures in Fahrenheit in different parts of Mexico. Davis and Gertler, PNAS, 2015. Copyright 2015 National Academy of Sciences, USA.

Patterns of air conditioning vary widely across Mexico. There is little air conditioning in cool areas of the country; even at high-income levels, penetration never exceeds 10 percent. In hot areas, however, the pattern is very different. Penetration begins low but then increases steadily with income to reach near 80 percent.


Davis and Gertler, PNAS, 2015. Copyright 2015 National Academy of Sciences, USA.

As Mexicans grow richer, many more will buy air conditioners. And as average temperatures increase, the reach of air conditioning will be extended, even to the relatively cool areas where saturation is currently low. Our model predicts that near 100 percent of households will have air conditioning in all the warm areas within just a few decades.

Global air conditioning potential

We expect this pattern to hold not only in Mexico but around the world. When you look around, there are a lot of hot places where people are getting richer. In our study, we ranked countries in terms of air conditioning potential. We defined potential as the product of population and cooling degree days (CDDs), a unit used to determine the demand for energy to cool buildings.

image-20160721-32602-1j9dwsj.jpgDavis and Gertler, PNAS, 2015. Copyright 2015 National Academy of Sciences, USA.

Number one on the list is India. India is massive, with four times the population of the United States. It is also extremely hot. Annual CDDs are 3,120, compared to only 882 in the United States. That is, Indias total air conditioning potential is more than 12 times that of the United States.

Mexico ranks #12 but has fewer than half the CDDs experienced by India, Indonesia, Philippines and Thailand. These countries currently have lower GDP per capita, but our research predicts rapid air conditioning adoption in these countries over the next couple of decades.

Carbon cliff?

What does all this mean for carbon dioxide emissions? It depends on the pace of technological change, both for cooling equipment and for electricity generation.

Todays air conditioners use only about half as much electricity now as in 1990, and continued advances in energy efficiency could reduce the energy consumption impacts substantially. Likewise, continued development of solar, wind and other low-carbon sources of electricity generation could mitigate the increases in carbon dioxide emissions.


ACs cranking in Shanghai, China. question_everything/flickr, CC BY-NC-ND

As an economist, my view is that the best way to get there is a carbon tax. Higher-priced electricity would slow the adoption and use of air conditioning, while spurring innovation in energy efficiency. A carbon tax would also give a boost to renewable generating technologies, increasing their deployment. Low- and middle-income countries are anticipating large increases in energy demand over the next several decades, and carbon legislation along the lines of carbon tax is the most efficient approach to meeting that demand with low-carbon technologies.

Pricing carbon would also lead to broader behavioral changes. Our homes and businesses tend to be very energy-intensive. In part, this reflects the fact that carbon emissions are free. Energy would be more expensive with a price on carbon, so more attention would go to building design. Natural shade, orientation, building materials, insulation and other considerations can have a big impact on energy consumption. We need efficient markets if we are going to stay cool without heating up the planet.

The ConversationLucas Davis, Associate Professor, University of California, Berkeley

This article was originally published on The Conversation. Read the original article.

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Ministry of Defence to sell 13 sites for 17,000 homes

Image copyright Ministry of Defence
Image caption Amport House in Andover, Hampshire, is one of 13 sites the Ministry of Defence is planning to sell

A total of 13 Ministry of Defence sites will be sold to provide land for up to 17,017 homes and will raise 225m, the government has said.

Defence minister Mark Lancaster said 12,565 of the homes were “expected to materialise in this Parliament”.

He acknowledged this would impact on civilian and military staff but provisions were being made, he said.

The sites include an RAF base, barracks, ex-World War Two airfields and a chaplaincy centre.

They also include two golf courses at RAF Henlow and Southwick Park in Hampshire.


Meanwhile, Network Rail has announced it will release land at almost 200 sites for 12,000 new homes by 2020.

This includes 5,000 homes in London, 3,600 homes in Manchester and the north, 1,700 homes in the Midlands and the east of England and 1,400 homes in the south of England.

The 13 military sites that will be sold by the MoD are:

  • RAF Henlow, Bedfordshire
  • Middlewick Ranges, Essex
  • Amport House, Andover, Hampshire, the British Armed Forces chaplaincy centre
  • Land at Harley Hill, Catterick, North Yorkshire
  • Chalgrove Airfield, Oxfordshire, a former World War Two airfield
  • Colerne Airfield, Chippenham, Wiltshire, a former World War Two airfield
  • Azimghur Barracks, Chippenham, Wiltshire
  • Prince William of Gloucester Barracks, Grantham, Lincolnshire
  • Old Dalby, Melton Mowbray, Leicestershire
  • Venning Barracks, Telford
  • Parsons Barracks, Donnington
  • Southwick Park, Fareham, Hampshire
  • Royal Marines Stonehouse, Plymouth

The MoD said the land at Venning and Parsons Barracks are the only sites that will not have housing built on them, as they will be used for commercial development at the request of Telford and Wrekin Council.

Defence Secretary Michael Fallon said: “We are getting rid of land that we don’t need to build homes that we do, generating hundreds of millions of pounds in the process.

“Our commitment to protect and increase the budget for our armed forces means that every penny of that will be reinvested into defence, helping to keep Britain safe.”

But shadow defence secretary Clive Lewis said: “Affordable housing is desperately needed across the UK, particularly by service families, who have seen the cost of their housing go up as conditions get worse.

“So it’s disappointing that the MoD has failed to say how many of these potential new homes will be affordable, or how many could be set aside for service personnel.

“In fact, they cannot even reassure us that these sites will be used to build new homes at all,” he said.

Image copyright AP
Image caption Defence Secretary Michael Fallon said the sale would generate “hundreds of millions of pounds”

“What we’re looking at is the double impact of 18,000 MoD staff losing their jobs and public land potentially being sold on the cheap for developers to profit from,” a Public and Commercial Services union spokesman said.

“The government must learn from the mistakes of the past and ensure any land sold not only realises its full value, but that house-builders are forced to ensure enough affordable homes are provided.”

In a written statement, Mr Lancaster said consultations will take place over the coming weeks with “stakeholders” including trade unions, to determine the future of each site and their occupants.

“The release of land by the MoD has the potential to provide land for new homes and we will continue to engage with impacted local authorities to determine how the department’s assessment of housing unit allocation against each site may be considered as part of the authority’s Local Plan,” he said.

“I acknowledge that these moves will have an impact upon civilian and military staff; the department is making arrangements to provide for units and functions based at sites which will not have a future defence requirement.”

An MoD spokeswoman said it was too early to confirm how exactly it would affect staff at the sites, but she said “the majority” will be provided for and moved to accommodation elsewhere, for example.

Mr Lancaster said the sales would contribute 225m towards the MoD’s 1bn target for land release sales, as set out in its spending review last year.

The release of the sites contributes to the government commitment to provide land for 160,000 homes by 2020, he said.

The 2015 Conservative manifesto pledged that 200,000 quality Starter Homes would be built over the course of the Parliament, reserved for first-time buyers under 40 and sold at 20 % below the market price.

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There Are All Kinds of Signs of a High-End Real Estate Slowdown

According to real-estate website StreetEasy, 12 of the condos in Manhattan currently listed at over $20 million have had their prices cut by 5 percent or more in recent months, while only 2 of them have seen any increase in their listing price. Among the cuts is a condo at 1 Central Park South. It’s been on the market for more than 250 days, and is now on sale at $45.5 million, $6.45 million less than its price a few weeks ago.

That’s just one of the indications that the market may be slowing down. Here are some others: 

Turning one apartment into two

One developer recent chopped a $45 million listing at 10 Sullivan into 2 separate apartments. The 8,400 square feet property is now split into a 3,000 square foot listing for $11 million, and a 5,400 square foot listing at $29.5 million. 

Waiting it out

Some sellers are acting cautious amid a perceived glut in supply. One developer had all the approvals he needed to start listing luxury units at 111 W. 57th St., but he has decided to hold off, saying “if you have a market where you think marketing would be ineffective for now, why would you launch and spend the money?”

Giving up

Some are choosing to abandon plans for new real-estate projects all together. Earlier this year, developers who had planned to convert Manhattans Sony Building into ultra-luxury condominiums agreed to sell the tower for more than $1.4 billion instead of developing the flats themselves.

Loans are getting harder to find

Building luxury condos takes some financing, and that market is drying up a little. In May, New York luxury-condo builder Extell Development Co. said construction financing for One Manhattan Square was taking longer than expected.

Land sitting idle

There are signs that the land used to build luxury condos may be seeing less interest at the high prices sellers are asking. Brokerage Ariel Property Advisors said that a mere 48 land deals were completed in the first half of 2016, compared with 79 in the year-earlier period.

Dwindling stock performance

Jitters are showing up in the stock market as well. Shares have been declining in both Toll Brothers Inc., the biggest U.S. luxury-home builder, and Equity Residential, the largest publicly traded U.S. multi-family owner. 

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Inside Miami’s hottest $1 billion luxury hotel and shopping complex | Fox News

With locations in Hong Kong and Beijing, East bills itself as a collection of lifestyle business hotels.” (Courtesy of East, Miami)

Faena District, make room for Brickell City Centre, the all-new mega-development reshaping downtown Miamis Brickell neighborhood.

With a $1.05 billion price tagjust a notch above that of Alan Faenas still-unfolding $1 billion arts districtBrickell will have all the trappings of a commercial/residential mammoth, from rows of luxury retail shops (Saks Fifth Avenue and Valentino among them) to a flagship hotel called East, Miamiofficially opening next week.

East, a division of Chinese conglomerate Swire, was, like Faena, a blue-chip brand abroad before making its U.S. debut. With locations in Hong Kong and Beijing advertised as lifestyle business hotels, the Miami expansion will incorporate visual flairs and flavors befitting its leisure-obsessed surroundings.

The 40-floor hotel, designed by Miami-based firm Arquitectonica (exteriors) and New York-based Clodagh Design (interiors), flaunts an ethereal gray-and-blue palette throughout, from the 20,000-square-foot poolscape to the slate-colored interiors. Inside, charcoal-gray wood floors, floor-to-ceiling views, and furnished king-size balconies come standard, while 89 residential suites boast periwinkle crushed velvet sectionals, fully equipped kitchens, and laundry services for the ultramodern pied-à-terre.

Like East, the hotels tentpole restaurant brings its own international pedigree: Quinto La Huella is the first spin-off of Uruguays prized beachside grill Parador La Huella, which made S.Pellegrino and Aqua Pannas list of Latin Americas 50 Best Restaurants in 2015.

While the sleek, 9,700-square-foot proxy, designed by Los Angelesbased Studio Collective, adds some urban polish to Paradors beachy vibes, the parilla (a 20-seat, Benihana-style wood-fire grill that yields a distinct smoky finish)and several toques plucked from South America including executive chef Nano Crespo (who collaborated with Parador’s chef Alejandro Morales on the menu)promise distinctly original flavors among Miamis fusion-heavy fare.

There may be no shortage of hotels making colorful splashes on Miamis cityscape, but East, Miamis blend of awe-inspiring construction and fine-tuned tranquility is bound to make waves this summer. From $259/night;

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MahaNakhon: Why Asia’s futuristic skylines just got crazier

Bangkok, Thailand (CNN)German architect Ole Scheeren has been transforming Asian skylines with his signature geometric style for over a decade.

From the gravity-defying CCTV tower in Beijing to The Interlace in Singapore — which was awarded World Building of the Year 2015 — Scheeren likes to challenge traditional notions of what constitutes a skyscraper.

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