International construction market survey 2016
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Around the globe<br />
France – Paris<br />
Construction is strengthening – but contractors fight for work<br />
Economic overview<br />
French GDP is slowly recovering towards pre-recession<br />
levels but the country is still experiencing high<br />
unemployment of around ten percent while wages are<br />
stagnating and prices are decreasing mildly. Nationally,<br />
housing <strong>market</strong> prices have been falling, which has<br />
affected investment confidence.<br />
Construction <strong>market</strong> and trends<br />
Although the <strong>construction</strong> industry has strengthened, it<br />
is also fragmented between many small contractors and<br />
a few very large ones, and fierce competition is putting<br />
downwards pressure on profits. Obtaining finance can be<br />
challenging, and large contractors have been able to apply<br />
ruthless pressure on their subcontractors, so it will be<br />
welcome news that following several years of shrinking<br />
activity, <strong>construction</strong> output staged a recovery at the<br />
end of 2015.<br />
Paris dominates, with higher prices and stronger<br />
<strong>construction</strong> growth. The Paris retail <strong>market</strong> is strong<br />
and well established, while capital values and rents on<br />
the city’s residential <strong>market</strong> are among the highest in<br />
France having held up better than in the regions. Paris<br />
remains a highly attractive city for hotel operators, but<br />
high costs and finding sites remain a challenge.<br />
Future outlook<br />
The outlook is brighter in <strong>2016</strong> with <strong>construction</strong> growth,<br />
accommodative monetary policies and lower energy<br />
costs likely to play a significant role. The ‘Grand Paris’<br />
project, which includes the development of business<br />
clusters around Paris and a new transport masterplan,<br />
is one of the key projects that will drive the city’s real<br />
estate <strong>market</strong> in the years ahead.<br />
<strong>International</strong> building costs per m 2 of internal area, in <strong>2016</strong><br />
EUR<br />
USD<br />
(exchange<br />
rate: 0.92)<br />
Airports (building only)<br />
Domestic terminal, full service 3,650 3,970<br />
Low-cost carrier terminal, basic service 2,400 2,610<br />
Car parks<br />
Multi-storey above ground 570 620<br />
Multi-storey below ground 1,152 1,250<br />
Commercial<br />
Offices – Business Park 1,720 1,870<br />
CBD Offices – up to 20 floors medium (A-Grade) 2,250 2,450<br />
CBD Offices – high-rise prestige 2,800 3,040<br />
Education<br />
Primary and secondary 1,600 1,740<br />
University 2,050 2,230<br />
Hospitals<br />
Day centre (including basic surgeries) 2,200 2,390<br />
Regional hospital 2,750 2,990<br />
General hospital (e.g. city teaching hospital) 3,100 3,370<br />
Hotels<br />
3 Star travellers 1,950 2,120<br />
5 Star luxury 3,500 3,800<br />
Resort style 2,600 2,830<br />
Industrial<br />
Warehouse/factory units – basic 720 780<br />
Large warehouse distribution centre 890 970<br />
High-tech factory/laboratory 1,800 1,960<br />
Residential<br />
Individual detached or terrace style house – medium standard 1,250 1,360<br />
Individual detached house – prestige 2,030 2,210<br />
Townhouses – medium standard 1,250 1,360<br />
Apartments low-rise – medium standard 1,550 1,680<br />
Apartments high-rise 1,950 2,120<br />
Aged care/affordable units 1,600 1,740<br />
32<br />
Turner & Townsend
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