International construction market survey 2016

Around the globe
South Korea – Seoul
While construction activity is subdued, in the long term the market is set to bounce back
Economic overview
The weak Japanese yen and Chinese yuan are currently
making it harder for South Korea’s export-led economy
to compete. Exports fell by nearly eight percent in 2015,
the biggest decline in six years. Previously vibrant
shipbuilding and fabrication sectors have been hit by
falling oil prices, with massive financial losses and job
layoffs across the industry.
Despite this, the South Korean economy grew by
2.7 percent in 2015, but slowed in the latest quarter.
Construction market and trends
Construction in South Korea is relatively subdued
at present. Non-residential development of offices,
warehouses and factories has been hit by weaker
demand, while the country’s ageing population is
negatively affecting residential demand. New construction
has been down overall, and construction cost inflation is
negligible. Various measures are in place to encourage
residential construction, including low interest rates and
fiscal stimulus.
Future outlook
South Korea is set for recovery and the future is bright,
but its overdependence on exports is likely to keep the
economy stagnant for another year or two. This will weigh
heavily on confidence and new projects will struggle to
proceed. In the meantime, public sector-driven extensions
to transport and city infrastructure are likely to be the
main construction activities, with oil and gas fabrication,
shipbuilding and residential construction remaining
in a lull.
International building costs per m 2 of internal area, in 2016
KRW
USD
(exchange
rate: 1,187)
Airports (building only)
Domestic terminal, full service 3,110,750 2,620
Low-cost carrier terminal, basic service 2,176,950 1,830
Car parks
Multi-storey above ground 670,450 560
Multi-storey below ground 976,350 820
Commercial
Offices – Business Park 1,342,050 1,130
CBD Offices – up to 20 floors medium (A-Grade) 1,646,800 1,390
CBD Offices – high-rise prestige 2,073,450 1,750
Education
Primary and secondary 1,219,000 1,030
University 1,659,450 1,400
Hospitals
Day centre (including basic surgeries) 1,342,050 1,130
Regional hospital 1,951,550 1,640
General hospital (e.g. city teaching hospital) 2,073,450 1,750
Hotels
3 Star travellers 1,794,000 1,510
5 Star luxury 3,828,350 3,230
Resort style 2,452,490 2,070
Industrial
Warehouse/factory units – basic 1,076,400 910
Large warehouse distribution centre 837,200 710
High-tech factory/laboratory 3,109,600 2,620
Residential
Individual detached or terrace style house – medium standard 1,375,400 1,160
Individual detached house – prestige 2,033,775 1,710
Townhouses – medium standard 1,627,020 1,370
Apartments low-rise – medium standard 1,315,600 1,110
Apartments high-rise 1,674,400 1,410
Aged care/affordable units 1,435,200 1,210
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Turner & Townsend