The super-rich are looking at luxury doomsday bunkers in America that can withstand a nuclear attack or catastrophic natural disaster.
These units are known as “survival condos” and are many metres underground in a former Cold War-era missile silo in Kansas. People can try to ride out the worst there for at least five years.
Prices start at $1.5 million (Dh5.5m) for a basic 85 square metre unit, while a cool $50 million (Dh183 million) can get you the entire 15-storey silo, which can accommodate 120 people.
No firm purchases have been made and the identity of those interested is not clear as they are represented by third parties who sign non-disclosure agreements. But developer and owner Larry Hall believes the interest is serious and has even been asked to produce designs for a mosque and helicopter pad by one client.
Mr Hall told The National he knows of several interested buyers in the UAE who want to inspect the doomsday bunkers.
“We were recently asked to show both the completed silo and the new one that is under construction to a group from the UAE,” Mr Hall said.
“We are hoping that this visit happens in January. The new facility has a narrow window in the schedule to support these types of changes but that window will be closing fairly soon.”
These people are believed to be rich and influential figures who want to buy the whole silo rather than individual units.
“I would say this is unique to the Middle East as their interest is the entire facility – which is much more interesting.”
Residents would have access to a swimming pool, dog-walking park, rock climbing, a classroom, theatre and a shop. An aquaponic farm produces food. Special lighting and plans to rotate communal jobs to fight boredom are part of efforts to meet the psychological challenges posed by long-term life underground. A community group enforces living rules.
Renewable energy comes from wind turbines supplemented by diesel generators, while water comes from an aquifer. Buyers also must pay monthly service charges, excluding tax. There is 24-hour security.
Mr Hall has completed one silo, while the second is expected to be finished within 16 months. The existing bunker has 12 units, while the newer one will be bigger and could accommodate 24 units.
The original silo is sold out and those who purchased units are largely self-made millionaires who bought them for their families.
Mr Hall owns one of the units himself and said he believes interest from the UAE and the Gulf region to be even greater than he is aware of because non-disclosure agreements stop agents from revealing buyers' identities. Those interested also tend to be secretive.
The developer said one agent, who claimed to represent clients in the UAE, Saudi Arabia and China, told him that in all three cases the buyer wanted a “safe space” for their citizens.
“He [the agent] used the examples of students going to American universities, diplomats and even engineers and their families living or working in the US,” Mr Hall said.
“The concern was also the same – if some catastrophe, either man-made or a natural disaster were to happen, these citizens would have a safe place to go on short notice to find safety.”
The silo's upper section has 2.7-metre thick walls that can withstand a nuclear blast producing winds of more than 3,200kph. There are also advanced communications systems and residents would also be given secure transport to the silo in the event of a disaster.
Known as Altas F, the silos were named after a type of intercontinental ballistic missile, and only 72 were built by US army engineers in the 1960s. Most of them were decommissioned by the 1970s and sat idle for years until Mr Hall bought one for $300,000.
He previously worked as a government contractor and saw a gap in the market after 9/11 when emergency planning re-emerged as a government priority. He sank millions of his own money into the project.
The rising interest in these units is linked to the "prepper", or survivalist, movement, whose members stockpile food, water and medicine in readiness for a worst-case scenario.
“The interesting fact about Kansas is that it is in the middle of nowhere,” said Mr Hall.
“But it is halfway to everywhere.”
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Read more:
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At-risk nations to make case at UN climate summit
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THE SPECS
Engine: 3-litre V6
Transmission: eight-speed automatic
Power: 424hp
Torque: 580 Nm
Price: From Dh399,000
On sale: Now
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
THE SPECS
Engine: 1.5-litre, four-cylinder turbo
Transmission: seven-speed dual clutch automatic
Power: 169bhp
Torque: 250Nm
Price: Dh54,500
On sale: now
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
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Key changes
Commission caps
For life insurance products with a savings component, Peter Hodgins of Clyde & Co said different caps apply to the saving and protection elements:
• For the saving component, a cap of 4.5 per cent of the annualised premium per year (which may not exceed 90 per cent of the annualised premium over the policy term).
• On the protection component, there is a cap of 10 per cent of the annualised premium per year (which may not exceed 160 per cent of the annualised premium over the policy term).
• Indemnity commission, the amount of commission that can be advanced to a product salesperson, can be 50 per cent of the annualised premium for the first year or 50 per cent of the total commissions on the policy calculated.
• The remaining commission after deduction of the indemnity commission is paid equally over the premium payment term.
• For pure protection products, which only offer a life insurance component, the maximum commission will be 10 per cent of the annualised premium multiplied by the length of the policy in years.
Disclosure
Customers must now be provided with a full illustration of the product they are buying to ensure they understand the potential returns on savings products as well as the effects of any charges. There is also a “free-look” period of 30 days, where insurers must provide a full refund if the buyer wishes to cancel the policy.
“The illustration should provide for at least two scenarios to illustrate the performance of the product,” said Mr Hodgins. “All illustrations are required to be signed by the customer.”
Another illustration must outline surrender charges to ensure they understand the costs of exiting a fixed-term product early.
Illustrations must also be kept updatedand insurers must provide information on the top five investment funds available annually, including at least five years' performance data.
“This may be segregated based on the risk appetite of the customer (in which case, the top five funds for each segment must be provided),” said Mr Hodgins.
Product providers must also disclose the ratio of protection benefit to savings benefits. If a protection benefit ratio is less than 10 per cent "the product must carry a warning stating that it has limited or no protection benefit" Mr Hodgins added.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
HAJJAN
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