$3,900 per square metre: Where are 2018’s most expensive places to build?
According to the Inte...
Fresh research from consultancy firm Turner & Townsend has revealed the costliest places for construction companies to work.
According to the International Construction Market Survey 2018, New York has retained its position as the world’s most expensive city to build in, costing on average $3,900 per square metre space.
Another US city, San Francisco, held second spot on the list with construction costs of $3,736 per square metre.
Hong Kong ($3,703 per square metre) leapfrogged Zurich ($3,652) into third, while London ($3,617) held fifth place, registering noticeably higher costs than other regions in the UK, driven by high demand and a shortage of construction skills.
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In the foreword to Turner & Townsend’s report, Steve McGuckin, Global Head of Client Programmes, outlined the major observations on the industry writ large: “There is an expectation of increasing construction activity around the globe with a few exceptions, notably a reduction in the UK.
“This year’s survey shows skills shortages are prevalent across disparate markets. Just three of the 46 markets surveyed recorded a surplus. Skills shortages appeared in markets as different as Zurich, where labour costs $104 an hour and Bangalore, with $1.1 hourly.”
In terms of cost to build, New York construction costs were calculated as six times higher than in Bangalore (India), which was the cheapest place of the 46 studied with costs of $638 per square metre.
Turner & Townsend assessed six different building types when calculating the cost of an average project: Highrise apartments, prestige office blocks, large warehouse distribution centres, general hospitals, primary and secondary schools and shopping centres.
Global construction costs are expected to rise 4.3% in 2018 following a 4.1% rise in 2017. Buenos Aires is a notable outlier in this calculation, with costs predicted to rise by a staggering 35% over the next year.
France to invest €1.8bn in Egypt’s infrastructure
France will invest a total of €1.8bn into Egypt’s infrastructure focusing specifically on upgrading the Cairo Metro, building a railway to Sudan, and developing water and energy schemes. Officials have called the investment a “major boost to bilateral cooperation”.
The Cairo Metro
Included in the financing is a concessional government loan of around €800mn to upgrade Line 1 of the Cairo Metro, introduced in the 1980s. The financing will pay for 55 trainsets for the line and is provided by the French engineering company, Alstom.
Line 6 is also due to be upgraded using further state-guaranteed loans worth up to €2bn. Bruno Le Maire said that this would be negotiated over the next six months. France and Egypt have worked in close cooperation ever since Abdel Fattah al-Sisi became president in 2014, despite differences over human rights and strong criticism of Egypt by rights activists and some foreign states.
Nine more projects over the next half a decade
A further €1bn from France’s development agency, Agence Française de Développement (AFD), aims to cover a range of other projects over the next half a decade.
These projects include a railway line between Aswan, southern Egypt, and Wadi Halfa in Sudan, as well as several projects in the renewable energy and water purification industries. Bruno Le Maire, France’s Finance Minister, said Egypt was a “strategic partner and commercial dealings with it would be developed. France will substantially increase its direct exposure to Egypt, becoming the first counter-party for government to government loans,” he said.
According to Le Maire, the AFD will also €150mn to support the construction of a universal health insurance programme. French contractors such as Vinci and Bouygues have a long history of working on the Egyptian capital’s underground system.
Talking about the relationship between France And Egypt, Le Maire concluded: “France will substantially increase its direct exposure to Egypt, becoming the first counter-party for government to government loans”.