International construction market survey 2016

Around the globe
UK – other regions
Northern infrastructure and London halo drives growth with a guarded market outlook
Construction market and trends
Outside of London, there is a real sense of a variable-speed
construction economy. Across the south, the pull of demand
and a close geographical proximity to London is having
a clear impact on tender prices with consistent pressures
on capacity. The Cambridge market in particular is
experiencing high levels of construction activity, which
in a relatively small market is putting significant pressure
on costs.
Infrastructure is driving regional markets across the
North and sentiment remains positive around the future
outlook in this sector. HS2 is expected to provide a
catalyst for wider real estate development activity in the
key cities along its route, notably in the midlands and
north west, and there are significant construction
projects forthcoming in and around these areas. Further
north workloads are stable, but at a decidedly weaker
level in the north east and Scotland, and are the least
positive of all in Northern Ireland.
Future outlook
Overall, the next year is likely to be less predictable
and regional variations are expected to widen. With
limited capacity remaining a key feature of the industry,
upward cost pressures and therefore price increases
are expected in almost all areas over the coming
12 months, albeit at a reduced pace in comparison
to the previous year.
International building costs per m 2 of internal area, in 2016
UK South
GBP
UK North
GBP
Scotland
GBP
Northern
Ireland
GBP
UK Central
GBP
Airports (building only)
Domestic terminal, full service 3,360 3,225 3,050 2,870 3,000
Low-cost carrier terminal, basic service 2,470 2,400 2,300 2,250 2,315
Car parks
Multi-storey above ground 640 580 550 510 550
Multi-storey below ground 1,010 865 800 730 775
Commercial
Offices – Business Park 1,840 1,600 1,550 1,400 1,600
CBD Offices – up to 20 floors medium (A-Grade) 1,915 1,800 1,700 1,580 1,750
CBD Offices – high-rise prestige 2,520 2,365 2,200 2,080 2,255
Education
Primary and secondary 1,730 1,610 1,600 1,330 1,565
University 2,530 2,100 2,100 1,860 2,065
Hospitals
Day centre (including basic surgeries) 1,840 1,515 1,650 1,460 1,485
Regional hospital 2,575 2,460 2,500 2,250 2,440
General hospital (e.g. city teaching hospital) 3,150 2,925 2,900 2,660 2,910
Hotels
3 Star travellers 1,840 1,600 1,575 1,400 1,600
5 Star luxury 2,730 2,650 2,500 2,450 2,600
Resort style 2,415 2,100 2,050 2,030 2,050
Industrial
Warehouse/factory units – basic 735 665 650 610 670
Large warehouse distribution centre 880 785 775 710 795
High-tech factory/laboratory 1,785 1,650 1,600 1,480 1,650
Residential
Individual detached or terrace style house – medium standard 1,420 1,295 1,200 1,080 1,295
Individual detached house – prestige 2,415 1,650 1,600 1,480 1,635
Townhouses – medium standard 1,995 1,450 1,400 1,350 1,400
Apartments low-rise – medium standard 1,940 1,630 1,500 1,400 1,590
Apartments high-rise 2,260 1,950 1,900 1,810 1,950
Aged care/affordable units 1,735 1,530 1,500 1,330 1,525
74
Turner & Townsend