International construction market survey 2016

Around the globe
UK – London
London remains a forerunner, despite strained supply chain
Economic overview
Despite healthy GDP growth, increasing by 2.3 percent
over 2015, the UK’s economic outlook is uncertain due
to the referendum on whether the country will remain
part of the EU. UK investment growth now looks to be
weakening, and construction output slowed a little towards
the end of 2015.
Construction market and trends
London continues to lead the UK construction sector, and
has been responsible for much of the recent tender price
inflation. Annualised output growth in the capital, as of
the fourth quarter of 2015, is now 45.2 percent higher
than levels seen in 2008.
being selective in the projects they choose as demand
outstrips supply and clients are finding it increasingly
difficult to get commitment to bid in competition.
Future outlook
There is emerging evidence the residential demand that
is fuelling escalation of construction prices could peak
in 2016. Tender pricing will remain volatile for the next
18 months and will outperform UK general inflation levels,
with tender price inflation expected to run at 4.9 percent
in 2016, compared with 5.1 percent in 2015. London will
continue to be the dominant driving force of tender price
inflation in the UK.
For now, the capital remains overheated, with a strong
demand for major projects and a lack of capacity in the
supply chain to respond. As a result, contractors are
International building costs per m 2 of internal area, in 2016
GBP
USD
(exchange
rate: 0.68)
Airports (building only)
Domestic terminal, full service 3,680 5,410
Low-cost carrier terminal, basic service 2,730 4,010
Car parks
Multi-storey above ground 680 1,000
Multi-storey below ground 1,050 1,540
Commercial
Offices – Business Park 2,350 3,460
CBD Offices – up to 20 floors medium (A-Grade) 2,700 3,970
CBD Offices – high-rise prestige 3,300 4,850
Education
Primary and secondary 1,950 2,870
University 2,800 4,120
Hospitals
Day centre (including basic surgeries) 2,500 3,680
Regional hospital 3,100 4,560
General hospital (e.g. city teaching hospital) 3,500 5,150
Hotels
3 Star travellers 2,240 3,290
5 Star luxury 3,250 4,780
Resort style 2,840 4,180
Industrial
Warehouse/factory units – basic 840 1,240
Large warehouse distribution centre 1,000 1,470
High-tech factory/laboratory 1,940 2,850
Residential
Individual detached or terrace style house – medium standard 1,720 2,530
Individual detached house – prestige 3,170 4,660
Townhouses – medium standard 2,520 3,710
Apartments low-rise – medium standard 2,510 3,690
Apartments high-rise 2,800 4,120
Aged care/affordable units 1,820 2,680
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Turner & Townsend