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PRO INSTALLER FEBRUARY 2015
PRO BUSINESS
@proinstaller1
UK Construction being
propelled up the ranks
The annual ARCADIS International Construction Costs Report benchmarks
building costs in 43 countries across the globe.
The paper provides a snapshot of the current trends
in the construction industry and an outlook for what
this will mean in 2015.
In addition to the overall
costs, the paper also considers wider implications
for retailers, healthcare
providers, commercial and
residential developers.
According to the report, the recovery of the UK’s construction
industry is down to the strength
of Sterling relative to the Euro
and accelerating price inflation,
which have propelled the UK up
the rankings and making it the
8th most expensive country in
the world in which to build.
Switzerland, Denmark and
Hong Kong retained their places
in the top three of the list. Markedly higher than elsewhere in
the UK, Central London construction costs were found to be
higher than in any of the countries included in the research.
Construction in the financial
and technology sectors is experiencing a relatively healthy
period with falling vacancy levels, increasing activity levels and
cost inflation seen across many
major markets.
In areas where residential
development has also seen
significant growth such as the
UK, amongst other countries,
increased costs driven by the
housing boom are affecting
commercial development and in
some cases, introducing viability
challenges.
Prime residential investment
is however a global market and
developers are operating in a
wide range of markets to deliver
a balanced portfolio based on
return and the supply, demand
and risk profile of each location. Prime markets in London
have been a beneficiary of
these trends and will see rapid
acceleration in construction in
2015, which is expected to be
accompanied by high levels of
cost inflation.
The growth of multi-channel
retail has had some surprising
impacts on the bricks and mortar
side of the business. As well as
investments in on-line presence
and fulfilment, retailers have con-
‘As well as investments in on-line
presence and fulfilment, retailers
have continued to invest in a greater
number of smaller premises at the
expense of some larger stores’
One response to the challenge
of affordability has been an
increased interest from owners
and developers in the refurbishment of existing assets. European markets are presenting
particularly strong opportunities
either in high growth markets
such as London.
tinued to invest in a greater number of smaller premises at the expense of some larger stores. The
key reason behind this change in
strategy is the evolving retail real
estate footprint which is affecting
the way retail is designed, procured, constructed and operated
across the globe.
What does this
mean for 2015?
The prime housing is expected to
boom in London and other global
cities, according to the report and
which will impact on construction
costs. London will potentially see
price escalat [ۈو