[CMD UW]

Originally Posted by anm

1. Who says it is a mere tv tower? It is a mixed use building, not a tv tower.

2. In China and Russia the cost of land is lower than in most downtowns in the US. Moscow's IBC is essentially a redevelopment of a industrial brown field/commieblock district that has been an eyesore not that far from downtown, but not in the downtown at all.

3. Many other costs (labor and energy) are much lower in Russia and China than in the west (particularly labor in China and energy in Russia). Not sure about Dubai, but suspect it is also true for Dubai.

4. IBC towers are bulit by private investors. Yes, government-controlled companies (like Gasprom) do participate in these projects, so the government has some stake in this business, but none of the projects, to the best of my knowledge, is funded primarily by the government. Plus, you are probably wrong about projected losses - so far all indications are that IBC construction will be profitable.

While you are correct that labour and land costs are cheaper in China, Russia, etc, the one question that hasn't been answered is how are the investors (may it be private equity or government) going to recover their costs? What are the lease rates and who is going to lease the building? Will the government subsidize the initial costs and/or finance the interest?