International construction market survey 2016

Around the globe
South Africa – Johannesburg
Commodities, inflation and political turmoil driving cost escalation
Economic overview
Weak commodity export volumes and price inflation
are slowing the national economy. Confidence in the
government is down, exchange rates have dropped sharply
and recently raised interest rates are expected to be
on the increase again soon. With growth of 0.7 percent
recorded in the third quarter of 2015, the country is
close to being in a recession.
Construction market and trends
The construction market has been facing a difficult period,
with planned infrastructure spend reduced and industry
and development constrained by an oversubscribed and
fragile power infrastructure. While material costs remain
stable, currency depreciation is affecting imports and
placing added pressure on certain construction projects.
Future outlook
The country’s turbulent political and economic climate is
set to impact negatively on the construction sector, with
cost escalation projected to rise and tender rates expected
to increase at a rate higher than inflation in 2016 and
through to 2017. This is due to increased builders input
costs driven by labour rates, fuel costs and the impact
of the weak currency on imported components.
International building costs per m 2 of internal area, in 2016
ZAR
USD
(exchange
rate: 15.52)
Airports (building only)
Domestic terminal, full service 27,700 1,780
Low-cost carrier terminal, basic service 19,500 1,260
Car parks
Multi-storey above ground 5,000 320
Multi-storey below ground 6,000 390
Commercial
Offices – Business Park 8,200 530
CBD Offices – up to 20 floors medium (A-Grade) 11,000 710
CBD Offices – high-rise prestige 14,500 930
Education
Primary and secondary 8,900 570
University 11,500 740
Hospitals
Day centre (including basic surgeries) 9,900 640
Regional hospital 15,000 970
General hospital (e.g. city teaching hospital) 18,400 1,190
Hotels
3 Star travellers 13,500 870
5 Star luxury 22,500 1,450
Resort style 21,400 1,380
Industrial
Warehouse/factory units – basic 4,600 300
Large warehouse distribution centre 5,100 330
High-tech factory/laboratory 12,000 770
Residential
Individual detached or terrace style house – medium standard 7,000 450
Individual detached house – prestige 12,500 810
Townhouses – medium standard 7,700 500
Apartments low-rise – medium standard 8,300 530
Apartments high-rise 9,500 610
Aged care/affordable units 7,000 450
Retail
Large shopping centre including mall 12,500 810
Neighbourhood incl supermarket 9,300 600
Prestige car showroom 9,900 640
60
Turner & Townsend