International Construction Cost Commentary - Rider Levett Bucknall

International Construction 

Cost Commentary 

January 2009

Offices around the world 

AMERICAS 

CANADA 

Calgary 

Toronto 

CARIBBEAN 

Grand Cayman 

USA 

Boston 

Chicago 

Denver 

Honolulu 

Kona 

Las Vegas 

Los Angeles 

New York 

Orlando 

Phoenix 

Portland 

San Francisco 

Seattle 

Washington DC 

ASIA 

CHINA 

Beijing 

Chengdu 

Dalian 

Guangzhou 

Guiyang 

Hong Kong 

Macau 

Sanya 

Shanghai 

Shenyang 

Shenzhen 

Tianjin 

Wuhan 

Wuxi 

Xian 

Zhuhai 

INDONESIA 

Jakarta 

MALAYSIA 

Kota Kinabalu 

Kuala Lumpur 

PHILIPPINES 

Manila 

SINGAPORE 

Singapore 

SOUTH KOREA 

Seoul 

THAILAND 

Bangkok 

VIETNAM 

Ho Chi Minh City 

EMEA 

MIDDLE EAST 

Abu Dhabi 

Dubai 

Muscat 

United Kingdom 

Birchwood, Warrington 

Birmingham 

Bristol 

Edinburgh 

Liverpool 

London 

Manchester 

Newcastle Upon Tyne 

Sheffield 

Warton 

Welwyn Garden City 

Wokingham 

EUROPE 

RLB EuroAlliance 

Austria 

Belgium 

Bulgaria 

Czech Republic 

Estonia 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

Kazakhstan 

Latvia 

Luxembourg 

Malta 

Netherlands 

Norway 

Poland 

Portugal 

Romania 

Russia 

Spain 

Sweden 

Slovakia 

Slovenia 

Switzerland 

Turkey 

Ukraine 

OCEANIA 

AUSTRALIA 

Adelaide 

Brisbane 

Cairns 

Canberra 

Darwin 

Gold Coast 

Melbourne 

Newcastle 

Northern NSW 

Perth 

Sunshine Coast 

Sydney 

Townsville 

Western Sydney 

NEW ZEALAND 

Auckland 

Christchurch 

Otago 

Palmerston North 

Tauranga 

Wellington 

Disclaimer: The International Construction Cost Commentary is a twice yearly publication by Rider Levett Bucknall, designed to highlight key factors affecting the global cost of 

construction. While the information in this publication is believed to be correct at the time of publishing, no responsibility is accepted for its accuracy. Persons desiring to utilise any 

information appearing in the publication should verify its applicability to their specific circumstances. Cost information in this publication is indicative and for general guidance only and is 

based on rates at January 2009. 

Sources: Rider Levett Bucknall Research and Development, Australian Bureau of Statistics (ABS), Department of Foreign Affairs and Trade (DFAT), International Monetary Fund (IMF), 

Statistics New Zealand. 

2 

INTERNATIONAL CONSTRUCTION COST COMMENTARY: January 2009

Welcome 

Welcome to the January 2009 edition of Rider Levett 

Bucknall’s International Construction Cost Commentary 

(ICCC). From all of us at Rider Levett Bucknall we hope 

you and your family had a safe and enjoyable holiday season. 

With the global impacts of the credit squeeze still settling all 

around us, this commentary reviewing the global and local 

costs of construction is a very apt way for all professionals 

to start the new year with a clear understanding of the state 

of the various property markets across the globe. 

The ICCC uses global cost data to derive indexed measures 

of relative costs of construction within and between 

markets. In order to set this in the context of the wider 

economic environment, analysis is also provided on global, 

regional and local issues affecting your markets. 

If there’s one thing that we can be certain about in these 

uncertain times, it’s that the need for reliable expert advice 

and cost management is as essential as ever to assuring 

your successes. 

To ensure that we are continuously offering you the latest 

information on global and local construction costs, we are 

now producing electronic updates in between editions of 

the ICCC. To ensure you always have the most up-to-date 

information on costs in this fast paced industry, please refer 

to www.rlb.com for our essential updates. 

With our continued expansion across the globe, coupled 

with cross-regional collaboration between more than 80 

offices, Rider Levett Bucknall is pleased to be in a position 

to offer clients a sense of comfort that they are making 

sound decisions based on a foundation of reliable data. In 

uncertain times, reliable advice can bring you the certainty 

that makes all the difference. 

At Rider Levett Bucknall we are proud to continue 

providing you with a comprehensive suite of both 

international and local cost information documents to allow 

you to make successful decisions. 

If you would like further information on the content of this 

publication, or to register to regularly receive your copy, 

please visit our website www.rlb.com. 

Feedback is important to us. If you have a question, or 

would like to make a comment, please feel free to contact 

me via brian.dackers@nz.rlb.com or +64 9 309 1074. 

I extend my best wishes to you for a productive and 

successful start to the new year. 

Brian Dackers 

Chairman 

Rider Levett Bucknall 

3 


World at a Glance 

Over the latter half of 2008 the impact of the global credit crunch widened to affect not only the advanced 

economies but also the emerging economies. OECD forecasts for 2009 and 2010 suggest extremely subdued 

levels of growth and the need for sustained central government inputs across all major economies. The recent 

G20 meeting condensed the principles of this intervention, in terms of stimulating liquidity, strengthening capital 

and financial institutions, addressing regulatory deficiencies, unfreezing credit markets and protecting savings 

and deposits, as well as the implementation of fiscal measures to stimulate domestic demand and assistance to 

emerging economies to gain access to finance markets. 

For construction, this process will be somewhat time-consuming as the freeing-up of financial markets and 

credit availability will run before the re-establishment of confidence in residential, commercial and retail sectors, 

which may only then be reflected in more projects coming to market. Conversely though, the very fact of difficult 

market conditions is providing an excellent tendering environment for clients of the industry who do have 

liquidity of funding. 

Streamline Tower, Las Vegas. 

Photographer: Tom Craig, Opulence Studios. 

Project Management by Rider Levett Bucknall. 

Oriental Plaza, Beijing. 

Quantity Surveying by Rider Levett Bucknall. 

Americas 

The US residential construction market 

continues its decline and has now been 

joined, in many States, by the commercial 

market, which has been very adversely 

affected by the credit crunch, liquidity 

problems and the general retreat of 

confidence in markets. Continued stock 

market volatility has so far provided several 

false dawns as investors struggle to identify 

the bottom of this particular downturn. 

The end of the bear market should coincide 

with the resurrection of confidence across 

the economy generally, but its timing is as 

yet open to debate. 

As a subset of the wider economy, the 

construction market is currently reflective 

of general market conditions, in which 

confidence has dissipated and awaits the 

return of consumer activity. This has 

had, and is having, considerable effects 

on large speculative projects as they face 

credit availability problems, with lenders 

backing away from lower levels of risk than 

they would have coped with hitherto, or 

alternatively imposing a cost burden of 

higher interest rates. The knock-on effect 

for contractors and subcontractors is that 

they are now exposed to trawling for work 

in a much smaller pool of possible projects, 

with consequent effects on margins and 

profitability. 

Asia 

The rapid expansion which characterised 

performance in Asian markets until the 

middle of 2008, has been supplanted by 

the impact of global economic downturn, 

as market-overlap has impacted upon 

overseas demand for products and the 

financial ills of the developed economies 

have been visited upon emerging markets. 

Overall, according to the IMF’s Regional 

Economic Outlook released in November 

2008, Asian growth is projected to have 

slowed from 7.6% in 2007, to 6.0% in 2008 

and then to 4.9% in 2009. Although the 

softening of international and domestic 

demand is evident, as noted by the IMF, 

most Asian countries are emerging from 

a period of relatively high inflation, so any 

monetary easing to stimulate markets will 

have to be closely monitored to avoid the 

initiation of a new inflation cycle. However, 

rapid responses have been made in, for 

example, China, where interest rates have 

been slashed in response to falling domestic 

and external demand, which have in their 

turn driven down GDP growth projections. 

The formerly rapidly inflating growth of 

the mainland Chinese construction market 

has been significantly curtailed by falling 

demand and also by falling values in the 

property market. Similarly, in Hong Kong, 

price inflation in the construction market 

has been damped by the reduction in 

workload in Macau, where several major 

projects have been shelved, the result 

being that contractor and subcontractor 

markets have become more competitive 

in a market which is shrinking not only in 

its own terms, but relative to an increasing 

productive capacity to build. 

4 


EMEA 

Economies throughout the EMEA region 

have been seriously affected by the 

economic situation foreseen in the first 

half of the year. Although the downturn 

was expected to take effect in the later 

part of the year, the potential depth and 

severity are now becoming clearer. The 

effects have now percolated through to the 

Middle East, although it was the developed 

economies in northern Europe which first 

experienced the impacts. These effects 

were due to global financial and economic 

linkages which saw banking and financial 

systems exposed to sub-prime problems 

and then the downstream consequences 

of credit difficulties and waning confidence 

across all sectors. Share markets across all 

of Europe have been taken back by sudden 

and dramatic falls, while retailers are having 

to cope with falling sales and absence 

of consumer demand. Add to this the 

looming spectre of rising unemployment 

and the picture looks decidedly gloomy. 

Governments have reacted by attempting 

to stimulate market demand, with deep 

cuts in interest rates and promises to invest 

in public sector construction projects. 

However, in the UK housing market, home 

buyers are either unable or unwilling to 

return to the market while doubts remain 

on the jobs front. In construction, major 

projects have, in many cases, been shelved 

to await better times, with the result that 

construction prices are now falling back. 

Though materials costs are falling, this is 

partially offset by a fall in the relative value 

of sterling to other currencies. Clearly this 

margin-compression cannot last indefinitely, 

but whilst it does, there are opportunities 

for clients with funds to invest in 

construction for the long haul - if they 

have the confidence to do so. Although 

new build projects have been severely hit, 

many clients continue to invest in their 

existing assets, with specialist services such 

as whole life costs, RElifing, risk and value 

management become increasingly important 

in this market. Even the Middle East is not 

immune from the now global turmoil, as 

recent events of projects’ deferrals and 

suspensions clearly demonstrate. 

Oceania 

The Australian economy has lurched from 

a seeming inflationary spiral, towards a 

steep downswing, all in the space of just a 

few months. Although the shadow of this 

impact existed in the second quarter of 

the year, it was only in the third quarter 

that the turnaround began to gather pace. 

Australian GDP growth for 2009 is now 

expected to further weaken from a revised 

forecast of only 2.5% in 2008, before 

reviving in 2010. Unemployment is also 

forecast to rise, though throughout 2008 it 

stood at extremely low levels. Successive 

reductions of the interest rate by the 

Reserve Bank of Australia are running in 

parallel with the Federal Government’s 

commitment to stimulating the domestic 

economy, as the former fight to control 

inflation has been abruptly set aside. 

Additional federal commitment to spending 

on large infrastructure works will help 

to stimulate domestic economic activity, 

as money feeds through the layers of the 

economy, but will take time to build up a 

head of steam. In private sector building, 

much depends on a return of consumer 

and developer confidence, which has taken 

a battering recently with the combined 

impacts of the falling exchange rate, share 

market reverses and talk of a recession for 

the first time in almost twenty years. 

In New Zealand, the credit squeeze 

continues to stifle the general economy, 

presenting challenging times for the 

construction industry. Despite continued 

lowering of interest rates, the economy 

remains in recession, with consumer and 

business confidence extremely low and 

the trough not expected to be reached 

until sometime in 2009. Although there 

have been significant falls in international 

commodity prices, the falling NZ$ is 

outweighing any cost benefits on imported 

materials and this may be the biggest risk 

to building cost inflation in the short term. 

Construction markets are forecast to 

be weak through the next period, other 

than in infrastructure and other central 

government backed projects, which will 

provide some consistent work. 

Egg data centre, United Kingdom. 

Cost Management by Rider Levett Bucknall. 

The Queensland Gallery of Modern Art, Australia. 


5 


Construction Activity Cycle 

Kuala Lumpur 

Dubai 

Washington DC 

Manila 

San Francisco 

Canberra 

Perth 

Brisbane 

Adelaide 

New York 

Phoenix 

Portland 

Melbourne 

Denver 

Los Angeles 

Bangkok 

Honolulu 

Hong Kong 

Singapore 

VALUE 

UPTURN 

Darwin 

Tokyo 


Beijing 

Guangzhou 

Shanghai 

Shenzhen 

Seoul 

Seattle 

Wellington 

Christchurch 

London 

Birmingham 

Boston 

Las Vegas 

DOWNTURN 

Bristol 

Manchester 

Sheffield 

TROUGH 

Jakarta 

Macau 

Sydney 

Auckland 

TROUGH 

TIME 

Construction Activity Cycle Chart 

The Construction Activity Cycle chart 

depicts the position of each city in a 

theoretical construction industry business 

cycle. The aim of the chart is to provide 

an overview of the relative performance of 

each city in the context of its own economy. 

Each city has its own industry business 

cycle and as such cities’ cycles are not 

strictly directly comparable with each 

other. As the amplitude and frequency of 

the cycle(s) are not expressed in this chart, 

there is no direct parameter of extent of 

the cycle or of its time period. 

7 


International Tender Price 

Relativity Matrix 

The ‘International Tender Price Relativity Matrix’ 

shows the changing costs of works between 

July 2008 and January 2009. 

City Jul-08 Jan-09 % Change 

New York 154 154 0.0% 

London 151 151 0.0% 

Honolulu 141 143 + 1.4% 

San Francisco 140 140 0.0% 

Boston 135 136 + 0.7% 

Perth 129 132 + 2.3% 

Bristol 131 128 - 2.3% 

Washington D.C. 131 128 - 2.3% 

Darwin 123 128 + 4.1% 

Manchester 127 124 - 2.4% 

Los Angeles 123 124 + 0.8% 

Birmingham 125 120 - 4.0% 

Sheffield 124 119 - 4.0% 

Seattle 121 116 - 4.1% 

Singapore 122 112 - 8.2% 

Adelaide 109 112 + 2.8% 

Dubai 108 110 + 1.9% 

Sydney 110 109 - 0.9% 

Brisbane 109 109 0.0% 

Hong Kong 115 107 - 7.0% 

Melbourne 105 106 + 1.0% 

Canberra 104 106 + 1.9% 

Macau 110 104 - 5.5% 

Wellington 102 102 0.0% 

Phoenix 101 101 0.0% 

Portland 100 100 0.0% 

Denver 98 99 + 1.0% 

Auckland 99 98 - 1.0% 

Orlando 99 98 - 1.0% 

Las Vegas 97 98 + 1.0% 

Christchurch 92 92 0.0% 

Beijing 80 78 - 2.5% 

Shanghai 74 73 - 1.4% 

Guangzhou 69 67 - 2.9% 

Shenzhen 69 67 - 2.9% 

Please note: Figures for the above Percentage Change column are for the 6 month period 

between the July 2008 ICCC and the January 2009 ICCC. 

8 


International Tender Price Index 

The Tender Price Index graph shows the 

changing costs of works relative to Hong 

Kong’s base of 100 at October 2007 

200 

180 

160 

140 

120 

Index 

100 

80 

60 

40 

20 

January 2009 

2005 

2006 

2007 

2008 

2009 

2010 

Year 

•Hong Kong •Auckland •Beijing •Dubai •London 

•New York •Singapore •Sydney 

The International Tender Price Index chart 

demonstrates clearly the seismic nature of the 

impact on the construction industry of global 

economic woes. 

The longer term effects however are ongoing, as 

the shock waves ripple around the world. 

9 


Commentary by region: 

Americas 

200 

180 

160 

140 

120 

Index 

100 

80 

60 

40 

20 

January 2009 

2005 

2006 

2007 

2008 

2009 

2010 

Year 

•New York •Boston •Denver •Honolulu •Las Vegas •Los Angeles 

•Orlando •Phoenix •Portland •San Francisco •Seattle •Washington DC 

Tender Price Relativity Matrix - 

comparative costs of construction 

New York 154 

Honolulu 143 

San Francisco 140 

Boston 136 

Washington D.C. 128 

Los Angeles 124 

Seattle 116 

Phoenix 101 

Portland 100 

Denver 99 

Orlando 98 

Las Vegas 98 

The protracted housing downturn and weak domestic growth, combined 

with the ongoing credit availability problems, will together ensure that 

difficult economic conditions will continue well into 2009. The Federal 

Reserve’s December reduction of the US federal funds rate to a range 

from zero to 0.25% was unprecedented and further underscored the 

existence of a severe financial crisis in the USA. Fiscal stimulus has already 

been added to the system, but more may well be required 

to further stimulate growth and confidence. In the short term, the need 

to re-invigorate the economy has taken precedence over dealing with 

the budget deficit and the need to overhaul financial regulation. The key 

to revival is the restoration of confidence across all sectors, from 

investors through to consumers, which can only begin with the freeing of 

the credit lock-up. 

Phoenix 

Within the Phoenix Metro area, 

commercial construction has slowed 

significantly which, together with a 

continued stagnant residential construction 

market, puts the Phoenix Metro area firmly 

into a construction cycle downturn which 

is expected to last into 2010. Recently, 

numerous public and privately funded 

construction projects have been placed 

on-hold. This indicates that, at least in the 

near-term, Phoenix is likely to experience a 

continued downward spiral with job losses, 

reduced construction volume, investor 

and lender fright and further calls for 

government support of the construction 

industry. 

One of the main reasons for the significant 

slowing of overall construction, particularly 

commercial related construction, is ongoing 

significant pressures on both City and State 

budgets. The State is facing budget deficits 

of over $1.2B in 2009 and potentially over 

$2.0B in 2010. 

There continues to be much debate 

surrounding the higher education 

investment/economic stimulus package 

(SPEED) which, despite receiving legislature 

approvals to spend up to $1.4B to renovate 

and build educational facilities within 

Arizona, has recently run into final approval 

difficulties from within the Joint Committee 

on Capital Review (JCCR). At this time 

there remains a great deal of uncertainty 

10 


on the future of all SPEED related projects 

which, if implemented in their entirety, 

could potentially significantly help Arizona’s 

economy, which relies heavily on the 

construction industry. 

Despite the stagnant housing sector it is 

widely anticipated that, with The State 

of Arizona continuing to experience 

population growth, this current trend will 

show signs of a slow recovery in early 

2010. It is further anticipated that a slow 

recovery within commercial construction 

related works may follow behind the 

housing sector. 

Boston 

The Boston market continues its 

downward spiral. 

The residential construction market 

continues to struggle, with no new large 

scale condominium projects planned in the 

city and single family home construction 

effectively stalled. Condominium sales 

remain significantly below last year’s 

numbers and the median price of a single 

family home has now dropped by 14% over 

the last 12 months. 

The commercial market has suffered 

considerably during the credit crisis in the 

last 6 months, with all but a handful of the 

ongoing city centre developments grinding 

to a halt over issues with financing. Lenders 

have been reviewing and withdrawing 

financing on projects, while developers are 

seeking to fill their yet-to-be built office 

building before committing to construction. 

Office rents remain inflated, but with 

vacancy rates rising steadily as businesses 

downsize, this should correct over the upcoming 

months. 

Hospitals and Universities, long considered 

the “safe” option in Boston, have also 

signalled a cautious approach for the 

upcoming year. With issues over bond 

financing and reduction in endowments, 

the city’s major health and educational 

institutions have placed major capital 

projects under review and halted a number 

of high profile developments. 

Contractors are becoming more aggressive, 

and the only silver lining currently out 

there is that the next 12 months will be a 

great time to build - if finance is available. 

Los Angeles 

Los Angeles experienced significant declines 

in construction activity across many sectors 

in 2008 with residential permits down 

41.7% and non-residential permits down 

16.6%. 

The devastated national credit market is 

reflected in Los Angeles with construction 

lending down 52.5% and many projects 

struggling to break ground. Most notably, 

Los Angeles’ marquee project, the $2.7 

billion mixed-use development of Grand 

Avenue faces continued delays due to 

major financing issues. 

The residential market has been significantly 

impacted by the credit freeze. Park Fifth, a 

$1.3 billion 76-story development; Suncal 

Condo Tower, a $400 million dollar 

development and 9900 Wilshire Blvd., a 

$366 million dollar development have all 

been placed on hold. This trend is mirrored 

throughout the private sector in Los 

Angeles with construction loans becoming 

increasingly tougher to obtain. 

The one bright light for construction in 

Los Angeles is public projects. With funds 

already in place, these projects are avoiding 

the credit issues plaguing the private sector. 

Three major new infrastructure projects 

broke ground in 2008 totalling $470 million. 

The ongoing $869 million Metro Gold Line 

expansion and $504 million Tom Bradley 

International Terminal are both under 

construction until 2010. Public school 

construction is pushing forward with the 

$391 million Central Los Angeles Learning 

Center and two new LAUSD campuses 

totalling $218 million. 

In 2009 it is anticipated that there will be 

a continued reliance on the public sector 

to stimulate the Los Angeles construction 

economy, with no sign of improvement in 

any private sectors expected until 2010. 

New York 

The New York City area, like most 

major urban centres in the United States, 

has begun to experience a downturn in 

construction activity across all sectors. 

While construction continues on priorfunded 

privately financed projects, it is 

apparent that the area is bracing for a 

protracted and severe economic slowdown. 

The market for office space as well as 

luxury high-rise residences has dropped off. 

This, coupled with the dearth of private 

financing, has resulted in significant layoffs 

among the city’s largest developers. 

The hotel and hospitality sector has been 

particularly hard hit, experiencing declining 

occupancy rates in the 4th quarter of 2008 

(traditionally a busy season) for the first 

time in recent memory. It is expected that 

some 9,000 new rooms will come on line 

in 2009, mostly in the three-star and below 

category. No new five-star development is 

planned and the last of the major five star 

renovations is underway. 

The State is in the midst of a multi-billion 

dollar budget gap and the public sector 

will feel the pinch in coming months as 

government and agency projects are 

shelved. Quasi-public entities such as 

colleges and universities, especially privately 

endowed institutions, continue to develop 

capital projects as well as upgrades, 

maintenance, and even investment. 

Prices for major durable commodities have 

levelled or started to decline, especially 

those which are energy sensitive, in the 

wake of severely declining crude oil prices. 

Gasoline surcharges, in place for most of 

2008, are being rescinded. 

11 



Asia 

200 

180 

160 

140 

120 

Index 

100 

80 

60 

40 

20 

January 2009 

2005 

2006 

2007 

2008 

2009 

2010 

Year 

•Beijing •Guangzhou •Hong Kong •Macau •Shanghai •Shenzhen •Singapore 



Singapore 112 

Hong Kong 107 

Macau 104 

Beijing 78 

Shanghai 73 

Guangzhou 67 

Shenzhen 67 

Chinese GDP has returned to single figures, after peaking at almost 12%. 

This is symptomatic of falling demand and softening exports. However, 

China’s fiscal position remains strong and further stimulus to the economy 

could be derived from income tax reductions, following on from deep 

cuts in interest rates. Hong Kong, as a major financial centre has been 

particularly hard-hit, with huge losses recorded on the Hang Seng, tensions 

in the interbank market due to the credit crunch, depressed local demand 

and falling property values, following on from last year’s gains. Macau’s 

economy, founded as it is on tourism, entertainment and casinos, has 

suffered similarly as a direct consequence of rapidly falling consumer 

and investor sentiment. The freezing up of credit markets has severely 

strained Macau’s construction boom, resulting in suspension of several 

large projects under construction. The slowdown in Asian economies and 

property markets has also affected Singapore’s economic performance and 

market sentiment in the second half of 2008. Following the construction 

boom in Singapore for 2008, overall construction demand for 2009 is likely 

to weaken and building tender prices are expected to moderate. 

Hong Kong 

Tender prices in Hong Kong have risen 

continuously since 2005. However, in the 

midst of the current global financial crisis, 

which has worsened since September 2008, 

it has now become evident that the rising 

trend in tender prices has reversed and the 

Rider Levett Bucknall tender price index has 

peaked in the third quarter of 2008. Since 

August 2008, there have been fundamental 

shifts in two key factors, namely the 

surge in commodity prices and the Macau 

construction boom, which led to the rapid 

rise in tender prices in Hong Kong in the 

past two years. Commodity prices have 

now fallen rapidly against a much stronger 

US dollar, and also a number of major 

projects in Macau have been suspended. 

The unemployment rate of construction 

workers is expected to increase in the early 

part of 2009 as a large number of workers 

return to Hong Kong from Macau. 

Tender prices have fallen dramatically 

from the end of third quarter 2008 and 

12 


are expected to continue to drop in the 

first two to three quarters of 2009 before 

stabilising. The overall fall could be at least 

15% from the peak. Since the Hong Kong 

government has pledged to increase capital 

expenditure as one of the measures to 

combat the financial crisis and there will be 

more public sector projects going out to 

tender in the second half of 2009, tender 

prices are likely to show some mild upward 

swing towards the end of 2009. If by that 

time the US dollar has weakened again, 

as some economists have warned, and as 

the Hong Kong dollar is pegged to the US 

dollar, the rebound of tender prices may be 

more significant. 

Macau 

The construction boom in Macau has 

come to an abrupt end in the aftermath 

of the credit crunch, which impacted in 

September 2008. Construction activities in 

Macau have slowed down significantly and 

are expected to further deteriorate with 

the suspension of major casino and hotel 

projects. The overall real wage index of 

construction workers fell 11.83% year-onyear 

in the third quarter of 2008 and will 

decline further in the coming quarters as 

the remaining few projects in the gaming 

industry are progressively completed. 

With very few new projects available in 

the market and the fall in materials prices 

due to weak demand, construction cost in 

Macau is expected to fall substantially in the 

early part of 2009. 

Beijing, Shanghai, Guangzhou, 

Shenzhen 

Year-on-year growth in GDP slowed to 9% 

in the third quarter of 2008 from 10.6% in 

the first and 10.1% in the second, signifying 

that China’s economy is rapidly cooling 

down in the midst of the global financial 

crisis. The consumer price index rose 4% 

year-on-year in October 2008, which was 

significantly lower than the 8.7% recorded in 

February. Although construction activities 

have continued to expand, recording a yearon-year 

growth of 22.8% in construction 

output value in the first three quarters of 

2008, construction costs have began to 

decline as materials prices are falling due to 

weak demand country-wide. 

Many developers have suspended projects 

as a result of the fall in property values and 

the credit crunch.. The declining trend of 

construction cost will continue in the early 

part of 2009 when the central government’s 

4 trillion Yuan economic stimulus package is 

expected to gradually produce the desired 

effect. 

Singapore 

Singapore entered economic recession 

in the third quarter of 2008, as the global 

financial crisis began to impact upon the 

local economy in most sectors. Singapore’s 

GDP contracted by 0.6% year-on-year, 

with the construction industry registering 

a slower but double-digit growth of 12.8% 

for the same period. The government 

has adjusted its GDP growth forecast 

downwards to 2.5% in 2008 from the earlier 

forecast of 3%; and -1% to 2% in 2009. 

The Singapore property market has been 

affected by the global financial uncertainty, 

with declines in private residential sale 

prices and office rentals. The government 

has reduced the availability of land sites 

in view of the weakening outlook for the 

economy and the subdued property market. 

Data from the Building and Construction 

Authority (BCA) showed a contraction 

of private sector construction demand by 

37.5% for the third quarter of 2008 over 

the preceding quarter. As construction 

demand from the private sector reduces, the 

authorities have advised that it is monitoring 

the situation closely and public sector 

projects that were previously deferred may 

be brought forward. 

Underpinned by high construction demand 

for 2008, the BCA has estimated that 

construction demand could reach an alltime 

high of around S$30 billion. The BCA 

All Buildings Tender Price Index (TPI) for 

the third quarter registered a 14% yearon-year 

increase. Rider Levett Bucknall’s 

TPI remained at an average tender price 

escalation of 18.3% for the first 9 months 

of 2008 as compared with 2007. However 

for the fourth quarter, building tender 

prices eased, arising from a significant 

fall in tendering activity, and declines in 

contracting margins and building material 

prices. This declining trend is anticipated to 

continue through 2009, as the property and 

construction markets consolidate further. 

International Finance Centre Two, Hong Kong. 


LASALLE College of the Arts, Singapore. 

Photo courtesy of RSP Architects Planners & 

Engineers (Pte) Ltd. 

Project Management by Rider Levett Bucknall. 

13 



EMEA 

200 

180 

160 

140 

120 

Index 

100 

80 

60 

40 

20 

January 2009 

2005 

2006 

2007 

2008 

2009 

2010 

Year 

•Birmingham •Bristol •Dubai •London •Sheffield •Manchester 



London 151 

Bristol 128 

Manchester 124 

Birmingham 120 

Sheffield 119 

14 

INTERNATIONAL CONSTRUCTION COST COMMENTARY: January 2009 

European and particularly UK construction markets continue to be badly 

affected by the global downturn, the key symptoms being cancelled or 

deferred projects and extremely competitive conditions in the tendering 

marketplace. The extraction from Europe of skilled management and 

site labour to the UAE is now drying up as the UAE is also now being 

affected by global economic events. In the final quarter of 2008 several 

major projects in Dubai were brought to a standstill by falling demand and 

declining property values, mirroring the events which unfolded in Europe 

from the middle of the second quarter. 

Dubai 110 London 

pricing levels are currently extremely 

As the world economy continues to competitive. Rider Levett Bucknall forecast 

stagnate, London has seen in the last all-in tender price levels in London to 

quarter a significant fall in the demand for decrease by between 2.5% and 5.0% during 

building materials generally and in the price 2009 and up to 2.0% in 2010. 

of steel in particular. With the falling price 

of oil and waning demand for raw materials, Bristol 

the previously forecast inflationary pressure Construction activity levels are forecast 

on material prices has disappeared. The to deteriorate even further in the South 

recently announced Government capital West region over the next 12 months, 

construction spend package of £3bn is set following on from the difficulties of the last 

to mitigate part of this deficit and provide 6 months. As is the case in most of the 

a boost to the education, infrastructure UK, the residential sector is suffering due 

and affordable housing sectors. However, to difficulties in obtaining mortgages. We 

main contractors’ long term order books have also experienced a delay in enquiries 

are showing signs of weakening and to from Registered Social Landlords, as they 

win work we are now seeing a return to wait for the market to bottom out prior to 

acceptance of more risk averse tendering purchasing available sites. 

methods, such as single stage selective 

tendering. 

Commercial construction, covering offices, 

industrial and retail, is also experiencing 

The market is also experiencing the a slowdown. Examples are the recent 

tightening up of Main Contractor’s 

completion of major developments such as 

preliminaries and OHP levels. Sub-contract Cabot’s Circus in Bristol City Centre and

St David’s II in Cardiff which will effectively 

remove demand for retail development for 

some time. A number of key mixed use 

developments in the South West region 

have also been cancelled or delayed while 

confidence remains low. 

The South West and Bristol Region is 

following the National Trend with the 

downturn leading to redundancies among 

contractors, construction consultants, 

property agents and developers. 

Public sector works carries on however, 

particularly in the Defence, Education 

and Health Sectors, with major projects 

development programmes planned over the 

next five years, for example the Defence 

Training Academy in Wales. 

We believe the next 12 months will be 

a difficult and challenging period for the 

construction market, however the low 

levels of activity within the commercial 

sector will to some extent be offset by 

continued public sector spending. 

Manchester 

As with other UK and Global markets 

the Manchester and North West 

market has seen a significant decline in 

construction activity in the last 6 months. 

As the economy continues to languish, 

construction activity is likely to deteriorate 

further through 2009. 

The residential sector has been hit 

particularly hard, with North West house 

values suffering more than the UK average 

and with a substantial stock of apartments 

within Manchester remaining unsold. Local 

Registered Social Landlords have revised 

their strategies away from constructing 

shared ownership homes toward a rental 

accommodation bias. 

The commercial office market is 

experiencing a slowdown, as a number of 

major office schemes completing in 2009 

and 2010 have yet to secure occupiers, 

providing a surplus of accommodation and 

deterring developers from progressing new 

projects. It is predicted that Manchester 

city centre office rents are likely to perform 

worse than in any other major centre 

outside London. Two major occupiers who 

were recently looking for nearly 200,000 

square feet of accommodation have put 

searches on hold. 

A number of key developments in the 

North West have been cancelled or 

delayed, including Liverpool Football 

Club’s new stadium (£350m) and Stockport 

town centre redevelopment (£500m). 

Other large commercial developments 

are rumoured to be in delay or are being 

scaled down. 

The downturn has now led to redundancies 

starting to escalate among contractors, 

construction consultants, property agents, 

developers and even legal firms, with 

insolvencies also starting to rise. 

However, quasi public sector schemes 

remain a strong contributor to the 

market. North West universities such as 

Manchester Metropolitan, Liverpool and 

University of Cumbria all have significant 

capital projects in the pipeline, and the 

Government’s Housing Market Renewal 

Programme has over £500m of funding 

allocated to five key North West regions. 

Although the contraction of the market 

has led to more competitive levels of 

tendering, care should be taken regarding 

advising that overall construction prices will 

fall significantly due to the continued high 

price of materials and the poor levels of 

exchange rates. 

In summary, whilst the outlook for the 

commercial sector is poor, public sector 

spending is compensating to some degree, 

so it is not all bad news. However, the next 

12 months will be a difficult and challenging 

period for the North West construction 

market. 

Sheffield 

Construction work has slowed down 

dramatically across the area. The 

Sevenstones retail development, which 

will provide 860,000 ft2 in the heart of the 

city centre has been delayed until at least 

4th Quarter 2009. This has had a knock 

on effect on ancilliary demolition projects, 

which have also been shelved. The Moor 

development, which is set to revive the 

main pedestrian shopping area in the city 

with its indoor market has also been put 

on hold. 

Residential, office and hotel developments, 

which commenced prior to the global crisis 

are continuing to be completed, however 

new schemes are slow to reach the market 

Birmingham 

The Birmingham market has been severely 

hit by the credit crunch. Major schemes 

have been put on hold due to a lack of 

availability of finance and recent cuts in 

interest rates have not yet filtered through 

to the market. 

We envisage a reduction in tender prices 

over the next 12 to 18 months driven 

by increased competition for a reduced 

workload and reducing material prices, 

driven down by a sharp reduction in 

worldwide demand. However, due to the 

decrease in the value of sterling comparable 

to currencies used in trading commodities 

and construction materials, the full effect of 

the reduction in material prices will not be 

realised in the UK. 

Contractors and subcontractors are 

reducing margins in order to secure 

workload. 

This cannot be sustainable in the long term, 

and we see this resulting in a reduction in 

the general contracting market if market 

conditions and workload do not improve in 

the near future. 

The upside of the reduction in tender 

prices will provide clients with funding 

with a window of opportunity to procure 

projects at lower cost than has been 

recently available. 

Dubai 

The rapid ascent of the Dubai construction 

market has been slowed somewhat by 

the fall-out from global economic woes. 

Recent announcements of several major 

high-profile projects such as the Trump 

International Hotel and Tower being 

deferred or postponed, have followed hard 

on news of sharp falls in property values 

and the retreat of overseas investors. 

These effects are of course demonstrative 

of the impact of extremely problematic 

global economic conditions, but they 

also demonstrate the enormous external 

investment in Dubai from around the globe. 

However, it has to be said that no-one 

could be better-placed to withstand the 

economic storm than the Emirates, given 

the huge value of natural resources and the 

fact that a recovering global economy will 

once again demand the key product, namely 

oil, reliance on which the UAE is seeking 

to diversify away from by building into the 

service, tourism and industrial markets. 

As the Dubai construction economy 

scales back to shelter from the storm, 

the outcome will be significant reductions 

in the annual levels of construction cost 

increase to which we have become 

accustomed. Depending on the severity of 

the ongoing economic difficulties and the 

point at which the bottom is reached, there 

is of course the potential for large-scale 

deferral of work, as is evidenced by the 

sheer volume of currently ongoing work. 

That can be very rapidly affected by funding 

and viability concerns, which would spill 

over into demand for labour and materials. 

15 



Oceania 

200 

180 

160 

140 

120 

Index 

100 

80 

60 

40 

20 

January 2009 

2005 

2006 

2007 

2008 

2009 

2010 

Year 

•Adelaide •Canberra •Brisbane •Auckland •Christchurch 

•Darwin •Melbourne •Sydney •Perth •Wellington 

The supposed strength of the Australian economy has been challenged recently from several directions, stemming 

largely from international trade and finance linkages. Despite deep cuts in interest rates, the prospect looms 

of a continuing slide into recession, unless the bottom of the bear market is found and sentiment changes. The 

effect on construction has been shelved and cancelled projects and a general retreat from risk. Similar, but more 

profound effects are being experienced in New Zealand, where the credit availability problems touched down 

earlier, with several mezzanine funders failing, funding became harder to find and swingeing interest rate cuts 

designed to stimulate demand. In both Australia and New Zealand however, the silver lining on this particular 

cloud is the fact that, in many locations, the time to buy construction is now, as there are many contractors 

chasing few projects, creating a strong competitive edge to the contracting environment. 



Perth 132 

Darwin 128 

Adelaide 112 

Sydney 109 

Brisbane 109 

Melbourne 106 

Canberra 106 

Wellington 102 

Auckland 98 

Christchurch 92 

Adelaide 

In Adelaide there are a number of private 

projects being put on hold as a response to 

difficulties in obtaining funding, which, even 

if it is available, is bound into higher equity 

commitment on the part of the developer. 

The Federal Government’s approach 

has been to consider raising spending 

to stimulate the economy, whereas the 

State Government is debating cutting 

spending so as to avoid deficit. At the same 

time, costs of construction may show a 

modest rise due to labour cost increase 

through established enterprise bargaining 

agreements and imported materials 

increase, which are affected by the fall in 

the dollar. 

Although ongoing construction projects will 

fully utilise the capacity of the industry in 

the first half of 2009, we are already seeing 

both contractors and sub-contractors 

looking to replenish order books in a 

suddenly much more circumspect market. 

Brisbane 

The significant boom in office developments 

has slowed and the stalling of several 

projects is likely to result in an oversupply 

being avoided. Public sector work is 

progressing, although forecast tax revenue 

shortfalls may result in certain projects 

being delayed or deferred. Meanwhile in the 

retail sector, low consumer confidence, high 

hurdle rates and the reluctance of tenants 

to commit has resulted in a significant 

slowdown, although we expect this sector to 

recover quickly from the downturn, driven 

by population growth. Materials costs are 

still rising, although they are being subsumed 

in falling labour costs and reducing margins. 

A clear 2-tier market has emerged, the 

cost of major projects continuing to rise 

albeit more slowly than in previous years. 

However the more general market has 

tightened. 

16 


Canberra 

The volume of projects now entering 

the marketplace has reduced to a more 

sustainable level with the result that more 

competitive tendering conditions are now 

being felt. With the smaller selection of 

projects available, local contractors and 

sub-contractors alike are reducing their 

overheads and margins in an attempt 

to secure future workload, especially 

since many Sydney-based companies are 

venturing further afield into the Canberra 

market. Despite continuing upward 

pressure on material and labour costs, 

overall prices increases are modest and 

have been somewhat camouflaged by the 

tighter tendering conditions and eroding 

margins. 

Contractor sentiment towards the state 

of the market is apprehensive and there 

are signs of reduced confidence in the 

residential and commercial sectors. 

However, the public sector continues 

to provide a consistent stream of work, 

somewhat offsetting the slowdown in 

commercial sectors. 

The immediate outlook is for extremely 

competitive market conditions, offering 

potential clients an excellent tendering 

environment in the first half of 2009. 

Darwin 

The recent announcement that 

international giant Inpex will be investing 

$12bn in a new gas plant in Darwin in two 

years time is keeping optimism high and 

the economy buoyant in the NT. Front 

end engineering and design for the plant 

will be starting soon and a Govt. task force 

has been formed to ensure adequate social 

and economic infrastructure is put in place 

in time for the influx of workers and their 

families to Darwin over the coming years. 

This coupled with intervention works in 

remote communities, continuing works on 

the Darwin City Waterfront Project, and 

continuing and upcoming Defence projects 

at all major NT Defence bases will see 

tender prices continue their upward trend. 

Notwithstanding the current global credit 

crunch, with this scale of development 

earmarked for Darwin, we expect the 

construction industry to remain strong 

over the coming period. 

Melbourne 

Several major commercial projects are 

currently running through to completion 

in the next six months, amidst an already 

tightening overall construction market. 

Tendering opportunities have become 

scarce as developers have shied away from 

marginal projects, due to inability to obtain 

finance and lack of tenant certainty. All this 

has given rise to cuts in contractor and subcontractor 

margins, set alongside increasing 

building materials and wages costs and 

further fuelled by falling exchange rates, 

rising utilities costs and industry awards. 

There remains pent-up demand for 

residential projects and developers are 

exploring options, however these are 

dependant upon the return of confidence 

in the market and ability to obtain funding. 

Industry clients with high liquidity of funding 

will find excellent competitive tendering 

conditions in the first half of 2009. The 

public sector will be particularly well-placed 

to obtain good pricing for projects. 

Perth 

The Western Australian economy is 

probably better placed than most States in 

Australia to weather the current economic 

storms. However, the extent to which 

China slows or slips into recession has 

potential to initiate a further deterioration. 

Most construction sectors have been 

similarly affected by the slowdown and 

forecasts are for very much reduced 

consumer demand in the coming period. 

One result has been that, although rents 

are at an all time high, uncertainties in the 

general economy and a more cautious 

new State Government have led to the 

cancellation of a number of major projects. 

Whilst materials costs are anticipated to 

continue rising, labour costs have levelled 

and may even be falling in some specific 

trades. 

Overall, this is the first relief from a 

prolonged period of price increases. 

Tenders are beginning to show signs of 

increased competitiveness returning to the 

market. 

Sydney 

In addition to the global and national 

economic problems, there is ongoing 

uncertainty in the Sydney market for 

both the short and medium term, due to 

a State mini budget that raised property 

and land taxes and reduced infrastructure 

expenditure as well as the Federal proposal 

for increased expenditure on undefined 

capital works projects. Contractors are 

very aware that the number of future 

projects is diminishing. Current projects 

are nearing completion and it is becoming 

increasingly difficult to replace work in 

hand, so Contractors and sub contractors 

alike are now keen to look at all tender 

opportunities. As a consequence, labour 

cost increases are being absorbed within 

profit margins and materials price rises 

are being discounted as contractors 

and suppliers look to secure works 

commencing in the new year. 

Reduced tendered margins are being 

experienced and we expect this trend to 

continue throughout 2009. 

Auckland 

Despite interest rate cuts since July, the 

Auckland residential market remains flat. 

Meanwhile, the other building market 

sectors have now become similarly 

affected, with demand and access to 

development finance rapidly declining. 

Only the infrastructure sector has been 

unaffected by the downturn, with central 

Government funded projects continuing 

through the maelstrom. Local government 

spending conversely is set to be slashed. 

Despite weak demand, building materials 

costs for contractors are rising, due 

to general cost increases coupled with 

the falling New Zealand dollar, which 

is offsetting recent falls in international 

commodity prices. Highly competitive 

market conditions however are set to 

remain, with contractors targeting margins 

and overheads to secure a limited supply 

of work. 

The constraint on this process will be the 

point at which deeper cuts into profit levels 

become unsustainable. 

Christchurch 

General economic conditions in 

Christchurch mirror those in Auckland, 

although Christchurch has several 

major projects currently either under 

construction, recently commenced (AMI 

Stadium and New Christchurch Civic 

Building) or due to commence shortly 

(Christchurch Airport Redevelopment). 

Together, they have a combined value 

in excess of $300 million, which will be 

keeping the industry relatively busy well 

into and possibly through 2009. However, 

we are noting in recent tenders, greatly 

increased competition and associated price 

cutting in terms of margins. 

These conditions are likely to persist in 

the next period as tendering opportunities 

continue to be adversely affected by the 

lack of confidence in the market and 

problems of financing. This is already 

apparent in the small to mid-size project 

end of the market. 

Wellington 

Wellington is also feeling the effects of 

the credit crunch, but is coming off a 20 

year high in construction volume. The 

excess of labour supply thus created is 

giving rise to competition and price cutting 

in the context of fewer new tendering 

opportunities. However, Wellington has 

at least six major projects commenced 

or about to commence, with a total 

value of approx $200m. Further, two 

major Wellington City Council (WCC) 

projects are currently seeking consultant 

submissions, with confirmation that they 

will proceed, and there is also the new 

sports stadium and extensions to the City 

Art Gallery. 

These projects plus others in mid 

construction will keep the workforce busy 

through 2009 and into 2010. 

17 


International Building Costs 

LOCATION 

LOCAL 

CURRENCY 

OFFICE BUILDING RETAIL HOTELS 

PREMIUM 

GRADE A 

SHOPPING 

STRIP 

CENTRE SHOPPING 

5 STAR 3 STAR 

/ m2 / m2 / m2 / m2 / m2 / m2 

ASIA 

Beijing YUAN 6200-9050 5750-8700 6900-10450 5350-6800 10350-13250 7550-9500 

Guangzhou YUAN 5850-8650 5450-8200 6500-9550 4900-6250 9750-12350 7150-8750 

Hong Kong HK$ 13050-17600 12250-16800 13900-17900 10850-13850 19950-24300 16200-18800 

Macau MOP 12400-17000 11550-16100 13600-17000 19650-24100 15700-18700 

Shanghai YUAN 6050-8900 5550-8450 6800-10250 5250-6700 10150-13100 7550-9300 

Shenzhen YUAN 5850-8650 5450-8200 6500-9550 4900-6250 9750-12350 7150-8750 

Singapore S$ 2250-4250 2150-3200 2400-3450 3500-5000 2900-3350 

Jakarta IDR ('000) 8930-11280 7230-9300 6570-7550 12680-16000 10300-12250 

Ho Chi Minh City VND ('000) 16000-20000 14440-17500 12900-17500 20800-25500 16000-20550 

Seoul KRW (‘000s) 1820-2210 1370-1670 1040-1260 720-880 2460-3000 1400-1710 

Phillippines Php (‘000s) 35-40 28-32 28-34 24-28 45-60 38-42 

Kuala Lumpur RM 2000-3500 1700-2700 1500-3000 1100-1700 3800-4500 2000-2800 

Bangkok Baht (‘000) 30-38 28-30 25-30 20-25 52-67 35-40 

EMEA 

Birmingham GBP 1920-2500 1490-1920 2690-4130 670-910 1920-2500 1340-1820 

Bristol GBP 2020-2590 1540-2020 2780-4320 720-960 2020-2880 1390-1920 

Dubai AED 7900-9500 6300-7900 5200-6300 10000-12600 7300-8900 

London GBP 2300-2980 1780-2300 3170-4940 820-1100 2300-2980 1580-2210 

Manchester GBP 1970-2500 1490-1970 2690-4180 720-910 1970-2500 1340-1870 

Sheffield GBP 1870-2400 1440-1820 2590-3980 670-860 1870-2400 1300-1680 

OCEANIA 

Adelaide $AUD 2490-3580 2290-2780 1140-1640 1190-1340 3180-3830 2680-3080 

Auckland $NZ 2850-3260 2600-3160 1070-1840 820-1330 3570-4390 2200-2600 

Brisbane $AUD 2650-4050 2100-3150 1200-2090 1100-1600 3400-4550 2650-3800 

Canberra $AUD 3010-3690 2310-2880 1450-1750 1130-1700 3530-4130 2220-3070 

Christchurch $NZ 2725-3120 2500-3020 910-1400 645-1285 3400-4250 2145-2680 

Darwin $AUD 3470-4470 2680-3380 1160-1690 1040-1590 3670-4470 2230-2980 

Melbourne $AUD 2900-3600 2250-2800 1500-2000 900-1400 3600-4100 2800-3300 

Perth $AUD 3400-4700 2800-3500 1650-2400 1400-1900 4050-5070 2800-4200 

Sydney $AUD 3120-3900 2370-2800 1250-2000 1200-1500 3620-4500 2510-3010 

Wellington $NZ 2900-3300 2300-2600 1050-1650 850-1350 3600-4400 2400-2800 

USA 

Boston $USD 2420-3770 1880-2690 1610-2690 1350-2150 3230-4310 2150-3230 

Denver $USD 1510-2420 1080-1610 910-1450 700-1350 1990-3010 1130-1780 

Honolulu $USD 2370-4200 1990-3390 1670-4040 1400-3610 4200-5700 2690-4630 

Las Vegas $USD 1940-2420 1450-2050 1350-2100 1020-1560 2580-3880 1720-2310 

Los Angeles $USD 2050-3280 1400-2210 1290-2210 970-1510 2690-3610 1940-2690 

Phoenix $USD 1830-2690 1400-2050 1080-1720 970-1510 2260-3500 1510-2050 

Portland $USD 1990-2260 1450-2050 1290-2150 970-1610 2050-3070 1610-1990 

San Francisco $USD 2210-3440 1510-2310 1350-2530 1180-1780 2740-3770 2150-2910 

Seattle $USD 1780-2530 1240-2150 970-1830 970-1450 2370-3230 1670-2370 

Washington DC $USD 1830-3440 1510-2150 1020-2150 810-1510 2100-3340 1450-2050 

NY Region $USD 2480-3340 1940-2690 1400-1990 1290-1830 3500-4840 1990-2850 

18 


LOCATION 

LOCAL 

CURRENCY 

CAR PARKING INDUSTRIAL RESIDENTIAL MULTI-STOREY 

MULTI-STOREY BASEMENT FACTORY WAREHOUSE INVESTMENT 

OWNER 

OCCUPIED 

/ m2 / m2 / m2 / m2 / m2 / m2 

ASIA 

Beijing YUAN 1850-2450 2900-5150 2000-2800 2350-3400 2900-3400 3400-4650 

Guangzhou YUAN 1750-2300 2900-5100 1850-2550 2250-3350 2700-3100 3100-4250 

Hong Kong HK$ 5250-6100 8800-12800 6000-7000 6750-8200 9750-11800 11500-14450 

Macau MOP 5950-7900 7000-9450 8600-13650 

Shanghai YUAN 1850-2450 3150-5350 1950-2750 2350-3450 2900-3350 3350-4550 

Shenzhen YUAN 1750-2300 2900-5100 1850-2550 2250-3350 2700-3100 3100-4250 

Singapore S$ 680-1350 1450-2300 1160-1620 1000-1660 2000-2580 2450-4280 

Jakarta IDR ('000) 2650-3700 3700-4700 4250-5200 3700-4700 5200-6800 6150-8500 

Ho Chi Minh City VND ('000) 6050-9150 12200-16800 6050-7700 6050-7950 10650-13000 11500-15400 

Seoul KRW (‘000s) 510-640 670-830 720-880 650-790 880-1070 1170-1430 

Phillippines Php (‘000s) 18-20 20-24 27-30 24-28 34-38 36-40 

Kuala Lumpur RM 700-1000 1100-1500 950-1500 950-1400 1200-2200 1500-3000 

Bangkok Baht (‘000) 10-13 15-18 14-19 13-18 28-38 30-38 

EMEA 

Birmingham GBP 340-430 720-860 340-480 340-480 910-1490 1490-1920 

Bristol GBP 340-480 770-960 340-480 340-480 960-1540 1540-2020 

Dubai AED 2600-3150 3150-3700 3150-4700 5000-6300 6300-8900 

London GBP 380-480 860-1060 380-530 380-530 1300-1800 1780-2300 

Manchester GBP 340-430 720-860 340-480 340-480 910-1490 1490-1970 

Sheffield GBP 340-580 770-960 290-580 290-580 1100-1440 1440-1870 

OCEANIA 

Adelaide $AUD 620-770 940-1320 600-750 500-720 2140-2580 2190-2980 

Auckland $NZ 670-1020 1070-1480 460-870 460-820 2550-3050 2550-3750 

Brisbane $AUD 600-850 850-1800 630-1050 630-1050 2150-3260 2100-3590 

Canberra $AUD 640-880 790-1190 790-920 770-920 2340-2870 2650-3240 

Christchurch $NZ 635-970 965-1395 485-750 375-645 2435-2910 2500-3120 

Darwin $AUD 690-990 820-1190 750-1270 680-1090 2580-3230 2880-3470 

Melbourne $AUD 600-1000 950-1300 500-900 500-950 2400-3100 2700-3450 

Perth $AUD 720-1190 1050-1550 670-1100 670-1100 2900-4000 3200-4900 

Sydney $AUD 555-880 900-1360 625-850 650-850 2160-2730 2360-4500 

Wellington $NZ 700-1100 1200-1400 650-950 690-950 2650-3150 2650-3240 

USA 

Boston $USD 650-860 810-1080 1080-1610 910-1610 2150-3770 1610-2690 

Denver $USD 430-750 700-1020 650-970 750-1670 700-1990 

Honolulu $USD 750-1290 1080-1940 1180-3230 1180-1880 1720-3440 2310-6460 

Las Vegas $USD 590-910 700-1080 700-1020 650-970 860-2050 1080-2480 

Los Angeles $USD 540-970 910-1400 810-1290 700-910 1350-2310 1240-2690 

Phoenix $USD 590-750 810-970 750-1080 650-970 910-2260 1080-2580 

Portland $USD 860-1080 970-1450 910-1510 860-1180 1290-2420 1450-2530 

San Francisco $USD 700-1080 970-1450 1020-1450 750-1080 1510-2530 1400-3340 

Seattle $USD 700-910 1240-1400 650-1080 590-970 1290-2690 1290-2690 

Washington DC $USD 600-910 790-1160 940-1610 830-1000 1350-1890 1450-2370 

NY Region $USD 750-1130 910-1240 1720-2690 1080-1510 1670-2530 2800-4140 

19 


Key Statistics 

AUSTRALIA 

YEAR 

2005 2006 2007 2008 (P) 2009 (F) 2010 (F) 

GDP 2.5 % 2.9 % 4.4 % 2.5 % 1.7 % 2.7 % 

GDP per Capita $46,660 $47,263 $48,554 $49,078 $49,560 $50,452 

Exchange Rate (to 5 December to US$) 1.338 1.270 1.142 1.548 

PPP rate 1.388 1.407 1.425 1.471 1.500 1.507 

Inflation 2.8 % 2.9 % 3.0 % 4.6 % 3.3 % 2.4 % 

Unemployment 5.0 % 4.8 % 4.4 % 4.3 % 5.3 % 6.0 % 

CHINA 

YEAR 

2005 2006 2007 2008 (P) 2009 (F) 2010 (F) 

GDP 10.4 % 11.1 % 11.4 % 9.5 % 8.0 % 9.2 % 

GDP per Capita 6,041 Yuan 6,676 Yuan 7,400 Yuan 8,206 Yuan 8,920 Yuan 9,650 Yuan 


PPP rate 3.448 3.450 3.528 3.694 3.793 3.882 

Inflation 1.8 % 1.5 % 4.8 % 6.1 % 3.0 % 2.5 % 

Unemployment N/A N/A N/A N/A N/A N/A 

UNITED ARAB EMIRATES 

YEAR 

2005 2006 2007 2008 (P) 2009 (F) 2010 (F) 

GDP 8.2 % 9.4 % 7.4 % 7.0 % 6.0 % 5.6 % 

GDP per Capita AED87,089 AED92,495 AED93,628 AED94,350 AED95,152 AED94,906 


PPP rate 3.632 3.952 4.228 5.326 5.376 5.631 

Inflation 7.9 % 9.3 % 11.0 % 12.9 % 10.8 % 8.1 % 

Unemployment N/A N/A N/A N/A N/A N/A 

EURO ZONE 

YEAR 

2005 2006 2007 2008 (P) 2009 (F) 2010 (F) 

GDP 1.6 % 2.8 % 2.6 % 1.0 % -0.6 % 1.2 % 

GDP per Capita (Int $) $29,833 $31,445 $32,939 $33,882 $34,331 $35,164 


PPP rate N/A N/A N/A N/A N/A N/A 

Inflation 2.2 % 1.9 % 3.1 % 2.9 % 1.7 % 1.9 % 

Unemployment 8.6 % 8.2 % 7.4 % 7.6 % 8.3 % 7.4 % 

Definitions 

GDP: Gross domestic product, constant prices (Annual percent change) 

GDP per Capita: Gross domestic product per capita, constant prices (National currency) 

PPP rate: Purchasing Power Parity rate of exchange 

Inflation: Consumer Price Inflation 

Unemployment: Percentage of total workforce 

Exchange Rate as at 5 December 2008 

Annual percentages of constant price GDP are year-on-year changes; the base year is country-specific. 

GDP in constant national currency per person. Data derived by dividing constant price GDP by total population. 

Rate against the International dollar (USD), which renders purchasing power identical to the international dollar. 

20 


NEW ZEALAND 

YEAR 

2005 2006 2007 2008 (P) 2009 (F) 2010 (F) 

GDP 2.7 % 2.0 % 2.6 % -0.5 % -0.4 % 1.9 % 

GDP per Capita $30,833 $30,933 $31,535 $31,689 $31,811 $32,175 


PPP rate 1.535 1.535 1.558 1.580 1.631 1.647 

Inflation 3.2 % 2.6 % 3.2 % 4.0 % 2.3 % 2.1 % 

Unemployment 3.7 % 3.8 % 3.6 % 4.0 % 5.4 % 6.0 % 

SINGAPORE 

YEAR 

2005 2006 2007 2008 (P) 2009 (F) 2010 (F) 

GDP 7.3 % 8.2 % 7.7 % 2.5 % 0.5 % 3.0 % 

GDP per Capita $46,098 $48,328 $49,933 $50,854 $51,709 $53,478 


PPP rate 1.079 1.052 1.066 1.092 1.098 1.098 

Inflation 0.5 % 1.0 % 2.1 % 6.0 % 1.5 % N/A 

Unemployment 3.1 % 2.7 % 2.4 % 3.5 % 3.5 % 3.0 % 

UNITED KINGDOM 

YEAR 

2005 2006 2007 2008 (P) 2009 (F) 2010 (F) 

GDP 1.8 % 2.9 % 3.1 % 0.8 % -1.1 % 0.9 % 

GDP per Capita £19,528 £19,991 £20,512 £20,959 £20,891 £21,105 


PPP rate 0.649 0.646 0.648 0.651 0.658 0.662 

Inflation 2.0 % 2.3 % 2.5 % 2.1 % 2.0 % 2.0 % 

Unemployment 4.8 % 5.4 % 5.4 % 5.4 % 6.0 % 5.4 % 

USA 

YEAR 

2005 2006 2007 2008 (P) 2009 (F) 2010 (F) 

GDP 3.1 % 2.9 % 2.2 % 1.4 % -0.9 % 1.6 % 

GDP per Capita $37,141 $37,848 $38,306 $38,400 $38,045 $38,437 

Exchange Rate (to 5 December to US$) 1.000 1.000 1.000 1.000 1.000 1.000 

PPP rate 1.000 1.000 1.000 1.000 1.000 1.000 

Inflation 3.4 % 3.2 % 2.9 % 2.0 % 1.8 % 1.7 % 

Unemployment 5.1 % 4.6 % 4.6 % 5.6 % 6.9 % 6.3 % 

21 


Project Profile: 

Lumiere Residences 

Location 

Client 

Approximate Cost 

Regent Place, Sydney, New South Wales, Australia 

Frasers Property Australia 

AUD$300 million 

Completion Date 2008 

Sector 

Mixed use (residential and retail) 

Overview 

Rider Levett Bucknall has been involved in 

the construction of many of the world’s 

landmark tall buildings which form the 

skyline of some of our major cities. One 

example of such an iconic building is 

Lumiere Residences, recently constructed 

in Regent Place in Sydney’s mid-town. 

Lumiere consists of two towers – Tower 

A providing 456 residential apartments 

over 56 levels, and Tower B featuring 145 

serviced apartments over 30 floors. A five 

level sandstone podium beneath the towers 

contains a retail centre, commercial space 

and Club Lumiere, a leisure and fitness 

centre for Lumiere residents. 

The project’s renowned architects, Foster 

+ Partners, designed the development with 

environmental concerns and residents’ 

privacy in mind. The construction consists 

of eight slender glass towers connected to 

a central core which allows sunlight and 

cross-ventilation to reach to the very heart 

of the building. This feature has reduced 

the use of common walls allowing residents 

a true sense of privacy. 

Our Role 

Tall buildings first emerged in the United 

States in the late 19th century and are 

today worldwide architectural phenomenon 

requiring increasingly complex construction 

knowledge and expertise. 

Rider Levett Bucknall has extensive 

experience in the construction of tall 

buildings and are proud to have provided 

Frasers Property Australia with the 

following services during the creation of 

Lumiere Residences: 

• Estimating and strategic cost planning 

• Post-contract Project Cost 

Certification 

• Production of financier’s reports 

• Provision of tax advice 

• Replacement cost exercises 

• Review and certification of progress 

claims 

Testimonial 

Michael Goldrick, Project Director for 

Frasers Property Australia, commented 

that: 

“During the works I found all [Rider Levett 

Bucknall] staff very professional and cooperative 

in their approach to the various 

tasks allocated to the company. I would 

have no hesitation recommending and 

appointing Rider Levett Bucknall again”. 

Images Courtesy of Frasers Property Australia 

22 


Rider Levett Bucknall Offices 

OCEANIA 

Australia 

Adelaide 

Telephone: + 61 8 8100 1200 

E-mail: adelaide@au.rlb.com 

Contact: Stephen Knight 

Brisbane 

Telephone: + 61 7 3009 6933 

E-mail: brisbane@au.rlb.com 

Contact: Mark Burow 

Cairns 

Telephone: + 61 7 4032 1533 

E-mail: cairns@au.rlb.com 

Contact: Bill Wilkes 

Canberra 

Telephone: + 61 2 6281 5446 

E-mail: canberra@au.rlb.com 

Contact: Mark Chappè 

Darwin 

Telephone: + 61 8 8941 2262 

E-mail: darwin@au.rlb.com 

Contact: Paul Lassemillante 

Gold Coast 

Telephone: + 61 7 5595 6900 

E-mail: goldcoast@au.rlb.com 

Contact: Peter Spencer 

Melbourne 

Telephone: + 61 3 9690 6111 

E-mail: melbourne@au.rlb.com 

Contact: Michael Kerr 

Newcastle 

Telephone: + 61 2 4940 0000 

E-mail: newcastle@au.rlb.com 

Contact: Matthew Harris 

Northern NSW 

Telephone + 61 2 6659 2060 

E-mail: northernnsw@au.rlb.com 

Contact: Matthew Harris 

Perth 

Telephone: + 61 8 9421 1230 

E-mail: perth@au.rlb.com 

Contact: Alastair McMichael 

Sunshine Coast 

Telephone: + 61 7 5443 3622 

E-mail: suncoast@au.rlb.com 

Contact: Mark Brittain 

Sydney 

Telephone: + 61 2 9922 2277 

E-mail: sydney@au.rlb.com 

Contact: Bob Richardson 

Townsville 

Telephone: + 61 7 4771 5718 

E-mail: townsville@au.rlb.com 

Contact: Chris Marais 

Western Sydney 

Telephone + 61 2 9806 0044 

E-mail: westsyd@au.rlb.com 

Contact: Gary Train 

New Zealand 

Auckland 

Telephone: + 64 9 309 1074 

E-mail: auckland@nz.rlb.com 

Contact: Brian Dackers 

Christchurch 

Telephone: + 64 3 365 0590 

E-mail: christchurch@nz.rlb.com 

Contact: Malcolm Timms 

Otago 

Telephone: + 64 3 409 0325 

E-mail: otago@nz.rlb.com 

Contact: Chris Haines 

Palmerston North 

Telephone: + 64 6 357 0326 

E-mail: palmerstonnorth@nz.rlb.com 

Contact: Wayne Kitching 

Tauranga 

Telephone: + 64 7 579 5873 

E-mail: tauranga@nz.rlb.com 

Contact: Richard Gerrish 

Wellington 

Telephone: + 64 4 384 9198 

E-mail: wellington@nz.rlb.com 

Contact: Hugh Mackenzie 

ASIA 

China 

Beijing 

Telephone: + 86 10 6515 5818 

E-mail: beijing@cn.rlb.com 

Contact: S. W. Lo 

Chengdu 

Telephone: + 86 28 8670 3382 

E-mail: chengdu@cn.rlb.com 

Contact: Stephen Liu 

Dalian 

Telephone: + 86 411 3973 7778 

E-mail: dalian@cn.rlb.com 

Contact: S.W.Lo 

Guangzhou 

Telephone: + 86 20 8732 1801 

E-mail: guangzhou@cn.rlb.com 

Contact: Kenneth Kwan 

Guiyang 

Telephone: + 86 851 553 3818 

E-mail: guiyang@cn.rlb.com 

Contact: K.M.Chau 

Hong Kong 

Telephone: + 852 2823 1823 

E-mail: hongkong@hk.rlb.com 

Contact: Philip Lo 

Macau 

Telephone: + 853 2875 3088 

E-mail: macau@mo.rlb.com 


Sanya 

Telephone: + 86 898 8898 7866 

E-mail: sanya@cn.rlb.com 

Contact: Stephen Lai 

Shanghai 

Telephone: + 86 21 6330 1999 

E-mail: shanghai@cn.rlb.com 


Shenyang 

Telephone: + 86 24 2396 5516 

E-mail: shenyang@cn.rlb.com 

Contact: C.H.Chan 

Shenzhen 

Telephone: + 86 755 8246 0959 

E-mail: shenzhen@cn.rlb.com 


Tianjin 

Telephone: + 86 22 2339 6632 

E-mail: tianjin@cn.rlb.com 

Contact: S.W.Lo 

Wuhan 

Telephone: + 86 27 6885 0986 

E-mail: wuhan@cn.rlb.com 


Wuxi 

Telephone: + 86 510 8274 0266 

E-mail: wuxi@cn.rlb.com 


Xian 

Telephone: + 86 29 8833 7433 

E-mail: xian@cn.rlb.com 

Contact: Stephen Liu 

Zhuhai 

Telephone: + 86 756 388 9010 

E-mail: zhuhai@cn.rlb.com 


Indonesia 

Jakarta 

Telephone: + 65 6339 1500 

E-mail: rlb@sg.rlb.com 

Contact: Christopher Leong 

Malaysia 

Kuala Lumpur 

Telephone: + 60 3 2282 8838 

E-mail: ymfkl@tm.net.my 

Contact: Kang Kian Kiat 

Kota Kinabalu 

Telephone: + 60 8 821 1626 

Contact: Chin Hon Kong 

Philippines 

Manila 

Telephone: + 63 2 634 0535 

+ 63 2 634 3124 

+ 63 2 667 3579 

E-mail: rhl@rhl.com.ph 

Contact: Cora Ballard 

Singapore 

Singapore 

Telephone: + 65 6339 1500 

E-mail: rlb@sg.rlb.com 

Contact: Winston Hauw 

South Korea 

Seoul 

Telephone: + 82 2 582 2834 

E-mail: seoul@kr.rlb.com 


Thailand 

Bangkok 

Telephone: + 66 2 234 4933 

E-mail: rhlbthai@riderhunt.co.th 

Contact: William Lo 

Vietnam 


Telephone: + 84 83 997 3422 

E-mail: rlb@vn.rlb.com 

Contact: Lam Chye Shing 

AMERICAS 

Canada 

Calgary 

Telephone: + 1 403 571 0505 

E-mail: YYC@ca.rlb.com 

Contact: Cameron Greene 

Toronto 

Telephone: + 1 416 214 3405 

E-mail: YYZ@ca.rlb.com 

Contact: Anil Ramjee 

Caribbean 

Grand Cayman 

Telephone: + 1 345 946 6063 

E-mail: martyn.bould@ky.rlb.com 

Contact: Martyn Bould 

USA 

Boston 

Telephone: + 1 617 737 9339 

E-mail: BOS@us.rlb.com 

Contact: Grant Owen 

Chicago 

Telephone: + 1 312 558 3106 

E-mail: ORD@us.rlb.com 

Contact: Barbara McGill 

Denver 

Telephone: + 1 720 904 1480 

E-mail: DEN@us.rlb.com 

Contact: Peter Knowles 

Honolulu 

Telephone: + 1 808 521 2641 

E-mail: HNL@us.rlb.com 

Contact: Tony Smith / Paul Brussow / 

Maelyn Uyehara 

Kona 

London 

Telephone: + 1 808 883 3379 Telephone: + 44 207 398 8300 

E-mail: KOA@us.rlb.com E-mail: london@uk.rlb.com 

Contact: Kevin Mitchell Contact: Tony Catchpole 

Las Vegas 

Manchester 


E-mail: LAS@us.rlb.com E-mail: manchester@uk.rlb.com 

Contact: Andrew Field Contact: Phil Higham 

Los Angeles 

Newcastle Upon Tyne 


E-mail: LAX@us.rlb.com E-mail: newcastle@uk.rlb.com 

Contact: Gus Oppermann Contact: Dean Sheehy 

New York 

Sheffield 


E-mail: LGA@us.rlb.com E-mail: sheffield@uk.rlb.com 

Contact: Jay Weisberg Contact: Dean Sheehy 

Phoenix 

Warton 


E-mail: PHX@us.rlb.com E-mail: warton@uk.rlb.com 

Contact: Julian Anderson / Contact: Steve Aikman 

Scott Macpherson Welwyn Garden City 

Portland 

Telephone: + 44 170 787 1506 

Telephone: + 1 503 226 2730 E-mail: welwyn@uk.rlb.com 

E-mail: PDX@us.rlb.com Contact: Andrew Reynolds 

Contact: Graham Roy 

Wokingham 

San Francisco 

Telephone: + 44 118 974 3600 

Telephone: + 1 415 362 2613 E-mail: wokingham@uk.rlb.com 

E-mail: SFO@us.rlb.com Contact: Simon Kerton 

Contact: Gus Oppermann EUROPE 

Seattle 

RLB EuroAlliance 

Telephone: + 1 206 223 2055 

Contact: Mike Staples 

E-mail: SEA@us.rlb.com 

Telephone: +44 7774 667177 

Contact: Simon Squire 

E-mail: mike.staples@uk.rlb.com 

Washington DC 

Telephone: + 1 202 654 1729 

E-mail: DCA@us.rlb.com 

Contact: Robert Giles 

EMEA 

MIDDLE EAST 

Abu Dhabi 

Telephone: + 97 1 2676 6172 

E-mail: silas.loh@sg.rlb.com 

Contact: Silas Loh 

Dubai 

Telephone: + 97 1 4801 9100 

E-mail: dubai@ae.rlb.com 

Contact: Ken Barlow 

Muscat 

Telephone: + 968 2449 9676 

E-mail: stephan.lai@hk.rlb.com 


UK 

Birchwood, Warrington 

Telephone: + 44 777 198 6099 

E-mail: deryck.barton@uk.rlb.com 

Contact: Deryck Barton 

Birmingham 

Telephone: + 44 121 503 1500 

E-mail: birmingham@uk.rlb.com 

Contact: Mark Weaver 

Bristol 

Telephone: + 44 117 974 1122 

E-mail: bristol@uk.rlb.com 

Contact: Mark Williamson 

Edinburgh 

Telephone: + 44 131 554 3300 

E-mail: edinburgh@uk.rlb.com 

Contact: Peter Docherty 

Liverpool 

Telephone: + 44 151 225 0264 

E-mail: liverpool@uk.rlb.com 

Contact: Phil Higham 

23 


Global Tender Price Index 

Comparison 

LONDON 151 

YEAR TPI (%) CPI (%) NATIONAL 

2004 4.0% 1.3% 

2005 4.5% 2.0% 

2006 5.0% 2.3% 

2007 6.0% 2.5% 

2008 (P) 4.0% 2.1% 

2009 (F) -4.0% 2.0% 

2010 (F) -0.5% 2.0% 

NEW YORK 154 


2004 8.6% 2.7% 

2005 8.1% 3.4% 

2006 9.5% 3.2% 

2007 9.0% 2.9% 

2008 (P) 4.0% 2.0% 

2009 (F) 2.0% 1.8% 

2010 (F) 3.0% 1.7% 

BEIJING 78 


2004 -1.5% 3.9% 

2005 2.0% 1.8% 

2006 3.0% 1.5% 

2007 9.0% 4.8% 

2008 (P) 5.0% 5.0% 

2009 (F) 0.0% 2.0% 

2010 (F) 2.0% 2.0% 

HONG KONG 107 


2004 1.0% -0.4% 

2005 5.0% 1.0% 

2006 10.0% 2.0% 

2007 13.0% 2.0% 

2008 (P) 8.0% 3.0% 

2009 (F) -6.0% 0.0% 

2010 (F) 0.0% 2.0% 

SINGAPORE 112 


2004 2.3% 1.7% 

2005 3.4% 0.5% 

2006 3.3% 1.0% 

2007 26.3% 2.1% 

2008 (P) 15.0% 6.0% 

2009 (F) -10.0% 1.5% 

2010 (F) N/A N/A 

DUBAI 110 


2004 12.0% 5.0% 

2005 15.0% 7.9% 

2006 20.0% 9.3% 

2007 18.0% 11.0% 

2008 (P) 15.0% 12.9% 

2009 (F) 7.0% 10.8% 

SYDNEY 109 


2004 7.0% 2.6% 

2005 4.5% 2.8% 

2006 4.5% 2.9% 

2007 3.5% 3.0% 

2008 (P) 4.5% 4.6% 

2009 (F) 3.0% 3.3% 

2010 (F) 4.0% 2.4% 

AUCKLAND 98 


2004 10.0% 2.7% 

2005 5.0% 3.2% 

2006 4.0% 2.6% 

2007 1.0% 3.2% 

2008 (P) 1.0% 4.0% 

2009 (F) 2.0% 2.3% 

2010 (F) 3.0% 2.1% 

KEY 

CPI = Consumer Price Index 

TPI = Tender Price Index 

N/A = Not Available 

F = Forecast 

P = Provisional 

24

International Construction Cost Commentary - Rider Levett Bucknall

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