After all Dubai, China and Russia were big global players with tons of dollars to invest in large property projects. Last summer with oil prices at record levels it seemed these countries would be immune to the global economic turmoil.
By the autumn of last year the main stock market in Russia had lost three quarters of its value. But developers and property investors were bullish; the crisis was not hitting them they declared robustly.
In China the Shanghai World Financial Centre, the world's second tallest building, opened in a blaze of publicity and next door work was about to start on the Shanghai Tower which will be even taller. Developers gloated that it was a good time to build as the cost of materials and labour fell, but their shares plummeted.
And in Dubai they were publicly slapping themselves on the back for remaining immune. At Cityscape, the annual property fest, a kilometre high tower was unveiled and everyone seemed to ignore the fact that the crowds were smaller.
But suddenly it all changed. In the last few months a series of mega projects in all three countries have been delayed or cancelled. Giant cranes and machines have ground to a halt and the dream has gone sour.
Even the giants of the property world are now facing a crisis. So how did it all go so wrong so quickly?
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The 600 metre high Russia Tower designed by international award winning architectural practice Foster & Partners was to not just going to be the tallest building in the new Moscow City business district, but the tallest in Europe.
But its elegant 118 floors topped by a five star restaurant with luxury apartments and a five star hotel were being funded by a consortium of western banks.
As the west moved closer and closer to recession and the depth of the problems facing the banks could no longer be hidden they simply stopped funding Russian developments. The Russian government had been using proceeds from oil to prop up the rouble but when oil started falling so did the resources. The oligarchs who might have been able to keep things going were suffering too. It is estimated that the 15 richest men in Russia have lost $285 million in the last few months.
So work had to stop. Russia's largest developer Mirax has cut jobs and the country's second largest developer, LSR Group, has cut 10% of its 18,000 strong workforce.
It was inevitable that the big, brash projects would suffer. In November RussiaLand announced it was cancelling the Russia Tower. There is a now a big hole in the ground where it was to be built. But it is not the only building not going ahead in Moscow City.
'Everything was fine until it became clear that the crisis was not just happening in the west. It has hit a number of projects and developers but this is probably the most significant,' said David Klondar, general director of Waterman International, Moscow City's engineering and environmental consultant.
The demise of the Russia Tower points to other underlying problems for the commercial property sector. Klondar predicts that if a project hasn't started then it will be shelved. 'If a project is on site it will rarely be stopped because the authorities are very keen to have this business hub,' he explained.
Developer Africa Israel is due to begin Mall of Russia, the project's main shopping centre. But it is facing financial problems too and has frozen other projects. Even towers that are complete are facing problems as no one has money to rent their office space.
Shalva Chigirinsky, the head of Russian Land, has lost his financial backing for another Foster project. Crystal Island, a glittering, 1,476 foot pyramid, was meant to provide 27 million square feet of luxury space in a joint venture with the city government. Moscow Mayor Yuri Luzhkov is now desperately seeking a new investor for Crystal Island, so far unsuccessfully.
Mirax which is building The Federation Tower, designed by Sergei Tchoban and Peter Schweger, due for completion in 2012 is still confident it will be on schedule. But Schweger is not so sure. 'It's a house of cards that is built on Western loans and which is now collapsing,' he said.
Some estimates reckon that 80% of development has stopped. According to Elena Alpotava of Cushman & Wakefield, most offices were speculative and between 70 and 80% of the space will not be built for want of debt funding.
In China, once regarded as the one economy that could save the world, growth has been seriously compromised and all forecasts point to a significant downturn. Chinese property developers have seen millions of dollars wiped off their shares.
In Macau, the southern Chinese gambling mecca, a developer from Las Vegas has pulled out of a costly hotel construction project. In Beijing, the Hong Kong-based Swire Group has cancelled a portion of The Village, its new shopping and restaurant centre.
But there is a big difference in China, according to analysts. They reckon there are enough government owned developers to ensure that projects will go ahead and when they are complete the government will find tenants.
An example is The Shanghai Tower, a $2.2 billion helical tower, which will capture rainwater for its bathrooms and will generate electricity using wind turbines. There is little risk that the developers will run out of money for the tower, because all three companies are government-owned. This guarantees that the project will progress favourably.
However in Dubai even the state owned developers are delaying and cancelling projects amid speculation that the emirate, which is not oil rich, will have to rely on bailouts from oil rich Abu Dhabi.
Perhaps it is the sheer number of projects that have run into financial difficulties in a country where the credit crunch was dismissed as an example of western greed that is astounding. The list of delayed work includes some of the most expensive projects in the world.
Nakheel, the state owned developer famous for its palm tree shaped islands, has delayed work on major projects including the Trump International Tower and Hotel, Frond N villas and Gateway Towers. Work on its flagship Nakheel Tower, launched at Cityscape in October in a blaze of publicity and described as the tallest tower in the world has been delayed for at least a year.
Some of these towers may never be built according to analysts, other will merely be delayed. One major factor is the sheer ostentatiousness and expense of what can only be described as trophy towers.
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'Some of these grand, expensive tall buildings are now regarded as wasteful,' explained Nick Maclean, Managing Director of Middle East CB Richard Ellis. 'Large corporates have sought the very best accommodation in the world but they are now economising, they are returning to standard boxes because they are cheaper,' he said.
The difference between top quality and poorer standards has not been as wide in Dubai as other locations. So opting for a less ostentatious building makes sense at a time when corporates don't want to be seen spending unecessarily, he added.
Also some of these luxury buildings were only really feasible in times of plenty. The less grandiose will almost certainly be built eventually when the market place recovers.
One positive result of the downturn is that an expected over supply in accommodation is now unlikely to happen in Dubai so that when the recovery begins there will still be demand.
'There is some vacancy in office accommodation for the first time,' said Maclean. But this is because large companies are delaying the decision to move rather than not wanting to move. 'Acting as an intermediary we have identified the accommodation and struck a deal but they can't get the authority to finalise and move in,' he explained.
Maclean is bullish about the future in Dubai. He sites an increasing population, continued demand, lack of supply and the economic downturn getting rid of the less experienced developers as pointing to a buoyant future.
The big state backed players like Emaar and Nakheel may be delaying projects but it is they who will come out of the economic fog less bruised. 'If they are run well state backed developers have great advantages. They have access to state tenants and liquidity that is not available to private companies,' he pointed out.
While everyone ponders over when the recovery will come, as few doubt it, there is one piece of good news on the property horizon. The Shanghai municiple government has agreed a deal with Disney for the world's largest Disneyland in the world to be built close to the city's international airport. No doubt Mickey and co will be a great crowd puller.
