2016 RLB Global Construction Market Intelligence Report October 20161

INTERNATIONAL
REPORT
CONSTRUCTION
MARKET INTELLIGENCE
Third Quarter 2016

Rider Levett Bucknall | International Report Third Quarter 2016
The Rider Levett Bucknall Pages 6 and 7 feature Construction Key economic data are highlighted
International Report provides a Rate Ranges for different key on pages 12 & 13. This data describes
half-yearly snapshot of construction building types in cities within each the historical and projected economic
market conditions and price region, providing an easy cost conditions which the construction
movements around the world, via comparison between locations. industry functions within those
commentaries and analysis from regions or countries.
Pages 8 to 10 consider the wider
Rider Levett Bucknall directors in key
issue of the construction activity From pages 15 to 57, RLB directors
locations.
cycle for seven building market provide market intelligence
The RLB International Construction sectors, in each location, using the commentary, highlighting the key
Cost Relativity Index is shown on RLB Construction Activity Cycle issues that are impacting on the
page 4, with each location placed in Model to provide an insight into each construction industry in major
its ranking spot in respect of all the cities construction sectors position in global cities together with providing
other locations in the study. the market cycle. information relating to current
construction price movements.
A broad overview of global
construction economic issues is
provided on page 3 followed by a
table of historical and forecasted
movements in RLBs Tender Price
Index for 53 key cities on page 5.
Glossary of Terms
GDP Gross Domestic Product
CPI Consumer Price Index
mom month on month
yoy year on year
IMF International Monetary Fund
TPI RLB Tender Price Index
Building Cost Ranges and International Construction Cost Relativities

are available in the RLB Intelligence Smartphone App and via the
RLB Desktop WebApp.
Further information can be found To download our free App visit

at rlbintelligence.com rlb.com/app or scan the QR code.
Cover: Barangaroo, Sydney, Australia
2
International Construction
Global Outlook
The IMFs projection for global growth in 2016 is a modest 3.2% , broadly
in line with last year, and a 0.2 percentage point fall from the January
2016 World Economic Outlook Update. The IMF is projecting global
growth to strengthen in 2017 and beyond, driven primarily by emerging
markets and developing economies, as conditions in stressed economies
start to gradually normalize. But uncertainty has increased, and the risk
of weaker growth scenarios is becoming more tangible. The recent terror
related events in Europe, tension in Turkey, the United States upcoming
presidential election and determination of the UKs exit strategy are all
placing pressure on growth forecasts.
The rise in the introduction of remains the global growth engine, Within New Zealand, the economy
protectionist measures by some of contributing around two thirds of continues to perform well. Economic
the worlds leading economies is global growth with China steadily growth is projected to moderate
coinciding with a persistent slowing making its transition to a more somewhat to 3.0% in 2016 and 2.7%
of growth in the global economy. The sustainable growth mode by moving in 2017. Falling dairy prices and
World Trade Organisation (WTO) towards a more consumption-driven completion of many projects relating
has identified that during 2016, G20 economy. The Indian economy to Christchurchs earthquake-related
nations have introduced protectionist remains a bright spot, and ASEAN rebuild will curb activity, although
trade measures at the fastest pace economies have also continued to the slowdown in construction will be
seen since the 2008 financial crisis. perform well. attenuated by expansion elsewhere in
response to high immigration which
Further increases in protectionism Within the UK there is evidence
is also fuelling the growth in private
could lead to a less competitive world of a slowing of growth in private
consumption. Inflation is forecasted
and greater inflationary pressures. residential and commercial schemes
to rise but stay below target.
as investors and developers take
Five cities within Forbess Top 20
stock of the referendum decision Sub-Saharan Africas 2015 growth
Most Liveable cities have introduced
to leave the European Union. A was subdued after more than a
tax measures for foreigners
clearer picture has now emerged of decade of solid growth as reported
purchasing residential properties to
the Brexit plan. With further details by the IMF, however in 2016 it
assist in the tempering of heated
emerging of the timetable for the exit is forecasted to recover quite
housing markets. These cities include
from the EU and potential impacts, moderately. GDP has slowed from
Auckland, Melbourne, Sydney,
together with the Governments 4.6% in 2014 to 3.7% in 2015, the
Vancouver and Wellington.
commitment to infrastructure and lowest since 2009. GDP is expected
This could drive down investment and affordable housing should have a to recover during 2016 increasing to
hurt corporate margins and earnings. stabilising effect over the next six 4.6%.
Consequently, the possibility of an months.
asset price deflationary scenario
The Reserve Bank of Australias
could arise.
current monetary policy statement
The global construction outlook has forecasted very subdued
highlights differing prospects. USAs wages growth and very low cost
economy continues to recover but pressures globally, meaning inflation
the upcoming presidential election is expected to remain quite low for
may have economic consequences some time. Australia is still stabilising
in regard to potential realignment since the end of the mining boom
of trade agreements. Growth in and the continuing fall in global
Europe remains subdued overall, Asia commodity prices is creating
pressure on growth forecasts.
3
RLB International Construction

Cost Relativities
Rider Levett Bucknalls Construction Cost Relativity Index identifies the relative cost of constructing similar buildings across the globe. The
index is based on the local costing of standard building models. These models are costed worldwide using the same quantities and similar
specifications. The models are costed in local currencies and relativities calculated using a combination of statistical methods including:
Conversion into one currency method by converting local currency model costs using USD and IMFs published Purchasing
Power Parity (PPP).
RLB developed EKS multilateral index
RLB Relativity Factor, a weighted sum of one currency results.
The resultant index highlights the relativity in construction costs between key global cities.
CITIES
OSLO 226
HONOLULU 190
NEW YORK 187
BERLIN 179
DUBLIN 171
LONDON 166
PARIS 166
SAN FRANCISCO 164
HONG KONG 164
BRUSSELS 162
ROME 161
BOSTON 159
CHICAGO 154
WASHINGTON DC 150
LOS ANGELES 143
BRISTOL 138
AMSTERDAM 137
MACAU 137
MANCHESTER 133
BIRMINGHAM 129
MADRID 127
SYDNEY 127
DARWIN 126
SEATTLE 123
CANBERRA 118
DOHA 118
CHRISTCHURCH 118
PERTH 118
MELBOURNE 115
ABU DHABI 113
PORTLAND 112
ADELAIDE 111
WELLINGTON 110
DUBAI 110
RIYADH 110
TOWNSVILLE 109
SINGAPORE 108
MOSCOW 107
DENVER 106
AUCKLAND 105
BRISBANE 105
PHOENIX 105
LAS VEGAS 104
WARSAW 102
PRAGUE 99
BUDAPEST 95
BEIJING 89
SHANGHAI 84
GUANGZHOU 82
SHENZHEN 79
KUALA LUMPUR 74
HO CHI MINH CITY 67
JAKARTA 57
50 75 100 125 150 175 200 225 250
4
RLB TENDER PRICE INDEX ANNUAL % CHANGE

Q3 2016
Africa 2013 2014 2015 2016 (F) 2017 (F) 2018 (F) 2019 (F)
Cape Town np 5.0 6.0 7.0 8.0 4.8 4.8
Johannesburg np 8.3 7.2 7.5 8.0 4.8 4.8
Maputo np 4.0 4.0 4.0 4.0 4.0 np
Port Loius np 5.0 5.5 6.0 6.0 6.5 6.5
Pretoria np 8.3 7.2 7.5 8.0 4.8 4.8
Americas
Boston 6.1 5.0 3.5 4.8 4.1 4.1 4.1
Chicago 4.7 4.9 4.1 4.6 4.1 4.1 4.1
Denver 1.7 2.5 3.6 3.8 4.1 4.1 4.1
Honolulu 7.7 13.3 11.2 4.0 4.0 4.1 4.1
Las Vegas 0.9 3.6 4.4 5.9 4.6 4.1 4.1
Los Angeles 1.8 4.9 5.2 5.4 4.1 4.1 4.1
New York 7.3 5.0 3.4 4.6 4.1 4.1 4.1
Phoenix 2.5 3.7 3.7 4.4 4.3 4.1 4.1
Portland 1.7 6.0 4.6 4.6 4.1 4.1 4.1
San Francisco 1.8 6.1 9.4 4.3 4.1 4.1 4.8
Seattle 3.5 4.5 4.9 4.6 4.1 4.1 4.1
Washington DC 6.5 5.0 4.4 4.3 4.1 4.1 4.1
Asia
Beijing 1.0 2.0 (1.0) 0.5 2.0 2.0 2.0
Chengdu np 1.1 0.3 (1.1) 0.0 0.4 0.4
Guangzhou 4.1 3.0 (3.0) 1.0 2.0 2.0 2.0
Hong Kong 9.0 8.2 4.3 3.4 3.0 3.0 3.0
Macau 9.3 10.4 3.5 2.0 3.0 3.0 3.0
Seoul 2.4 1.1 (0.5) 1.3 1.7 1.8 1.9
Shanghai 2.0 (1.0) (4.4) (0.0) 2.0 2.0 2.0
Shenzhen 3.0 1.5 (0.7) 1.0 2.0 2.0 2.0
Singapore 4.5 1.5 1.5 np np np np
Singapore
Europe
Berlin np 1.8 2.2 2.0 2.0 2.0 2.0
Birmingham 8.0 7.1 4.0 3.0 2.5 2.8 3.3
Bristol 6.3 7.1 4.5 5.0 5.0 5.5 4.8
Budapest np np 2.5 3.0 3.3 2.5 np
Dublin 4.0 5.0 7.0 4.0 8.0 8.0 np
London 3.4 5.0 5.9 3.5 3.5 3.5 3.7
Sheffield 6.3 7.1 9.0 2.5 (1.0) (3.0) 0.5
Madrid np 0.0 (0.0) 0.1 0.8 0.1 0.1
Manchester 6.3 7.1 4.0 5.0 5.0 5.5 4.8
Moscow np 0.0 (5.0) 0.0 1.0 1.5 2.0
Warsaw np (0.8) 0.7 3.2 3.2 1.2 np
Middle East
Abu Dhabi 3.2 3.3 4.7 5.7 6.1 7.3 7.3
Doha 3.2 4.5 5.0 5.5 6.0 7.0 np
Dubai 3.2 3.7 4.6 3.0 3.5 3.5 3.5
Riyadh 4.4 5.0 4.8 5.0 5.0 5.0 5.0
Oceania
Adelaide 0.9 0.6 0.8 2.0 3.0 3.5 3.5
Auckland 0.8 4.1 5.1 6.7 4.6 3.5 3.0
Brisbane (1.9) 5.1 5.9 7.9 4.0 4.0 4.0
Canberra 2.2 1.6 2.0 2.2 3.0 3.0 3.0
Christchurch 5.1 6.0 6.0 4.0 4.0 4.0 3.5
Darwin 3.0 1.8 1.0 1.5 2.0 2.0 2.5
Gold Coast 0.0 4.1 4.0 6.0 5.0 4.0 3.0
Melbourne 0.2 1.5 2.0 2.0 3.0 3.0 3.0
Perth 1.1 0.8 0.7 2.1 3.0 3.0 3.0
Sydney 2.0 3.0 4.5 4.8 4.0 3.5 3.5
Townsville 1.3 2.0 3.0 3.0 4.0 4.0 4.0
Wellington 2.0 3.4 3.0 3.0 3.0 3.0 3.0
NP: Not published
5
MARKET data
International construction rate ranges
The following data represents estimates of current building costs in the respective market. Costs may vary as a consequence of factors
such as site conditions, climatic conditions, standards of specification, market conditions etc.
Range of cost per m2 of gross floor area
Local Office Building Retail

Currency Premium Offices Grade A Mall Strip Shopping
Low High Low High Low High Low High
AMERICAS
Bahamas USD 2,495 4,455 2,335 3,270 1,635 2,830 1,520 2,390
Barbados USD 2,270 3,790 2,055 3,250 1,745 2,700 1,520 2,380
Boston USD 2,960 4,840 1,940 2,960 1,615 2,690 1,075 1,615
Cayman Islands USD 2,865 4,200 2,650 3,865 2,755 3,865 2,420 3,315
Chicago USD 2,475 3,875 1,505 2,155 1,400 2,260 1,130 1,400
Denver USD 1,720 2,745 1,235 1,885 970 1,560 755 1,455
Honolulu USD 3,070 5,705 2,635 4,305 2,260 5,330 1,885 4,680
Las Vegas USD 1,505 3,175 1,130 2,045 1,240 5,165 700 1,560
Los Angeles USD 2,260 3,390 1,560 2,370 1,400 3,175 1,130 1,830
New York USD 3,765 5,920 2,960 4,035 2,690 4,305 1,615 2,690
Phoenix USD 1,615 2,960 1,185 1,885 1,185 1,830 805 1,400
Portland USD 1,940 2,690 1,400 1,940 1,505 2,585 1,290 1,940
San Francisco USD 2,155 3,765 1,940 2,960 2,100 3,500 2,420 3,500
Seattle USD 2,045 2,530 1,400 1,990 1,400 2,475 1,185 1,670
St Lucia USD 2,475 3,550 2,055 2,725 1,775 2,485 1,895 2,495
Washington D.C. USD 2,690 4,305 1,885 2,960 1,345 2,690 1,075 1,615
ASIA
Beijing RMB 7,550 12,450 7,100 10,700 8,300 12,700 7,350 11,450
Guangzhou RMB 7,100 11,350 0 9,900 8,100 11,500 7,000 10,500
Ho Chi Minh City VND ('000) 24,000 34,400 20,400 25,600 19,300 25,700 N/P N/P
Hong Kong $HKD 22,900 34,100 0 26,500 23,000 29,200 19,600 25,500
Jakarta Rp ('000) 9,648 13,200 6,670 10,620 6,520 8,515 N/P N/P
Kuala Lumpur RINGGIT 2,500 4,500 1,300 3,000 2,100 3,500 N/P N/P
Macau MOP 18,200 26,200 0 22,500 19,900 24,500 16,900 21,600
Manila PHP 32,468 44,303 26,197 35,705 27,512 31,659 20,836 23,365
Shanghai RMB 7,250 11,500 0 9,900 7,600 12,000 6,750 11,000
Singapore SGD 2,700 4,000 2,100 3,000 2,200 3,400 N/P N/P
EUROPE
Berlin EUR 1,355 1,775 990 1,150 1,145 1,460 835 1,040
Bristol GBP 1,960 2,580 1,580 2,370 2,700 3,800 860 1,625
Dublin EUR 1,800 2,000 1,600 1,800 1,900 2,100 1,000 1,200
London GBP 2,396 3,120 1,975 3,077 3,195 4,491 1,026 1,922
Madrid EUR 900 1,500 800 1,150 1,900 2,600 1,400 1,900
Manchester GBP 1,907 2,501 1,646 2,470 2,678 3,762 854 1,615
Moscow EUR 1,500 2,000 1,300 1,600 1,700 2,100 1,200 1,500
Oslo EUR 2,840 3,690 2,190 2,850 1,800 2,340 1,440 1,870
MIDDLE EAST & AFRICA

Abu Dhabi AED 5,800 7,000 4,700 6,600 4,100 6,500 N/P N/P
Dubai AED 5,800 7,000 4,700 6,600 4,100 6,500 N/P N/P
Saudi Arabia SAR 4,890 7,597 4,991 6,825 4,728 6,198 3,361 4,728
Doha QAR 6,500 8,500 6,100 8,200 5,300 6,500 N/P N/P
OCEANIA
Adelaide AUD 2,600 3,850 2,100 3,250 1,550 2,850 1,300 1,825
Auckland NZD 3,400 4,500 2,600 4,000 2,300 2,800 1,200 1,200
Brisbane AUD 2,600 4,000 2,000 3,000 2,300 3,100 1,100 1,600
Canberra AUD 3,194 4,141 2,590 3,267 2,195 3,080 1,175 1,936
Christchurch NZD 3,700 4,800 3,150 4,200 1,650 2,200 N/P N/P
Darwin AUD 3,100 4,150 2,400 3,800 1,730 2,590 1,230 2,090
Gold Coast AUD 2,450 4,000 1,900 3,000 2,150 3,100 1,050 1,600
Melbourne AUD 3,000 3,750 2,325 2,900 2,025 3,000 1,060 1,550
Perth AUD 3,150 4,770 2,575 3,740 2,300 2,800 1,025 2,565
Sydney AUD 3,250 4,600 2,400 3,450 1,800 3,750 1,400 1,800
Wellington NZD 2,940 3,360 2,310 2,625 1,300 1,800 N/P N/P
N/P: Not published
6
Rates are in national currency per square metre of Gross Floor Area except as follows:
Chinese cities, Hong Kong and Macau: Rates are per square metre of Construction Floor Area, measured to outer face of external walls.
Singapore, Ho Chi Minh City, Jakarta and Kuala Lumpur: Rates are per square metre of Construction Floor Area, measured to outer face
of external walls and inclusive of covered basement and above ground parking areas.
Chinese cities, Hong Kong, Kuala Lumpur, Macau and Singapore: All hotel rates are inclusive of Furniture Fittings and Equipment (FF&E).
Range of cost per m2 of gross floor area

Hotels Car Parking Industrial Residential
5 Star 3 Star Multi Storey Basement Warehouse Multi Storey
Low High Low High Low High Low High Low High Low High
AMERICAS
2,725 7,070 1,530 4,885 N/P N/P N/P N/P 1,410 2,280 1,410 4,565
2,595 4,325 1,735 2,700 N/P N/P N/P N/P 700 2,000 3,025 4,325
3,765 5,400 2,420 3,765 755 1,075 970 1,615 1,075 1,885 1,885 3,230
2,970 3,865 2,530 3,530 N/P N/P N/P N/P 1,875 2,970 2,260 3,640
3,120 4,845 2,045 2,585 700 1,185 970 1,505 1,075 1,400 1,400 2,260
2,155 3,335 1,615 1,990 540 755 970 1,290 980 1,635 915 2,045
5,545 8,020 3,500 5,865 1,075 1,560 1,505 2,850 1,560 2,420 2,100 4,780
3,765 5,005 1,615 2,960 540 915 645 1,615 540 1,075 755 4,360
3,390 5,060 2,260 3,120 1,075 1,290 1,240 1,775 1,075 1,830 1,720 2,800
4,035 5,920 2,960 4,035 970 1,615 1,345 2,160 1,240 2,155 2,155 4,035
2,960 4,575 1,615 2,690 430 700 645 1,075 590 1,075 970 1,990
2,045 2,960 1,615 2,045 915 1,130 1,185 1,615 970 1,615 1,615 2,585
3,230 5,380 2,690 3,765 1,075 1,400 1,775 2,045 1,505 2,045 3,015 4,575
2,315 3,390 1,720 2,260 860 1,075 1,075 1,560 970 1,345 1,505 2,690
3,315 4,985 2,495 3,090 N/P N/P N/P N/P 945 2,025 2,370 4,155
3,500 5,110 2,420 3,495 700 1,075 860 1,345 970 1,615 1,885 3,230
ASIA
12,900 17,000 9,600 12,350 2,220 3,000 3,700 6,500 4,300 5,450 4,000 6,100
12,800 16,500 9,460 11,500 2,050 2,950 3,650 6,300 4,100 5,050 3,750 5,600
31,100 38,100 23,400 30,300 8,800 13,100 18,000 24,500 5,970 9,100 15,400 23,300
35,700 43,600 29,400 34,000 8,950 10,600 18,400 25,200 15,100 19,000 21,500 37,200
13,670 17,420 10,410 11,875 3,460 4,450 4,450 6,190 4,650 5,680 6,430 9,986
5,000 7,000 2,500 3,500 800 1,200 1,400 3,200 1,000 1,800 1,900 4,500
30,600 37,600 24,600 28,400 N/P N/P 10,600 13,400 N/P N/P 13,700 21,800
53,507 61,599 43,190 48,854 14,666 16,892 16,083 18,510 17,397 20,533 27,209 48,450
12,600 16,600 9,300 12,000 2,050 2,950 3,850 6,400 3,900 5,050 3,600 5,750
4,300 5,600 3,300 3,700 700 1,400 1,500 2,250 1,100 1,600 2,000 3,200
EUROPE
1,985 2,755 1,355 1,770 470 680 785 1,040 365 730 990 1,407
2,250 3,000 1,300 1,740 400 800 925 1,440 360 650 1,700 2,400
2,000 2,200 1,340 1,440 400 500 600 1,000 400 560 1,400 1,600
2,526 3,400 1,706 2,191 410 820 1,090 1,760 443 799 2,008 2,785
1,950 2,600 1,350 1,800 700 900 800 1,200 600 800 700 1,000
2,042 2,793 1,292 1,719 323 646 875 1,396 354 646 1,636 2,292
2,800 3,500 1,700 2,200 430 550 800 1,000 500 600 1,200 1,500
3,920 5,090 2,960 3,850 690 880 890 1,160 1,570 2,030 2,420 3,150

9,000 12,000 6,000 8,500 1,800 3,600 2,850 4,500 1,500 2,700 4,500 6,500
9,000 12,500 6,000 8,500 2,300 3,600 3,100 4,500 1,850 2,900 4,500 6,500
8,304 10,110 5,989 7,465 920 1,220 2,265 2,845 3,312 4,046 4,576 9,647
11,500 14,500 7,500 8,500 N/P N/P 2,750 4,500 N/P N/P 6,500 7,800
OCEANIA
3,500 4,400 2,500 3,400 600 900 1,300 1,900 625 1,100 2,250 3,550
4,500 5,500 3,200 3,800 650 900 1,400 2,000 600 850 3,000 4,000
4,000 5,500 2,800 4,000 700 1,100 1,600 2,100 600 1,100 2,000 3,200
3,933 4,849 2,861 3,995 729 1,009 978 1,395 676 1,051 2,653 3,850
3,700 4,200 3,000 3,300 850 1,350 1,750 2,200 720 1,100 N/P N/P
3,600 4,450 2,830 3,550 750 1,250 1,170 1,530 800 1,420 2,010 2,650
3,400 5,500 2,600 4,000 700 1,100 1,500 2,050 600 1,100 1,758 3,200
3,450 4,500 3,050 3,500 655 1,060 1,110 1,365 555 1,100 2,200 3,500
3,600 4,430 2,645 3,635 750 1,000 1,850 3,100 550 1,020 2,230 3,830
4,050 5,350 2,850 3,600 700 1,050 1,000 1,600 670 1,050 2,350 4,350
3,400 4,100 2,310 2,730 500 900 1,890 2,730 900 1,400 2,625 3,360
7
MARKET data
Construction Sector Activity
RLB Construction Market Activity Cycle

Activity within the construction industry traditionally has been subject to
volatile cyclical fluctuations.
The RLB Construction Sector Activity Cycle represents the construction
development activity cycle. Each RLB office highlights the current construction
sector activity position within the market activity cycle of those key
construction sectors within their region.
Each sector is categorised by three positions within the cycle; Peak, Mid and
Trough. Within each position, activity is further defined by either declining or
growing within that sector.
The up and down arrows highlight the current status within the three
positions of the cycle by means of the three colours identified in the cycle
diagram below.
AMERICAS Houses Apartments Offices Industrial Retail Hotel Civil

Anguilla
Antigua and Barbuda
Bahamas
Barbados
Bermuda
Boston
British Virgin Islands
Cayman Islands
Chicago
Cuba
Denver
Dominica
Dominican Republic
Grenada
Guadaloupe
Haiti
Honolulu
Jamaica
Las Vegas
Los Angeles
Martinique
Montserrat
Netherlands Antilles
New York
Phoenix
Portland
Puerto Rico
San Francisco
Seattle
St Kitts and Nevis
St Lucia
St Vincent and the
Grenadines
Trinidad and Tobago
Turks and Caicos Islands
US Virgin Islands
Washington, D.C.
NP: Not published
8
AFRICA Houses Apartments Offices Industrial Retail Hotel Civil

Cape Town
Johannesburg
Maputo (Mozambique)
Port Louis (Mauritius)
Pretoria
ASIA
Beijing
Chengdu
Guangzhou
Ho Chi Minh City
Hong Kong
Jakarta
Kuala Lumpur
Macau
Manila
Seoul
Shanghai
Shenzhen
Singapore
EUROPE
Berlin
Birmingham
Dublin
London
Madrid
Manchester
Milan
Moscow
Paris
Sheffield

Abu Dhabi
Doha
Dubai
Riyadh
OCEANIA
Adelaide
Auckland
Brisbane
Canberra
Christchurch
Darwin
Gold Coast
Melbourne
Perth
Sydney
Townsville
Wellington
NP: Not published
9
MARKET data
Construction Sector Activity
Global Growth Sectors vs Decline Sectors

NUMBER OF CITIES
60
50
40
30
20
10
0
GROWTH DECLINE
HOUSES APARTMENTS OFFICES INDUSTRIAL RETAIL HOTEL CIVIL
Global No. of Cities within Zones

NUMBER OF CITIES
50
45
40
35
30
25
20
15
10
0
PEAK ZONE MID ZONE TROUGH ZONE
HOUSES APARTMENTS OFFICES INDUSTRIAL RETAIL HOTEL CIVIL
RLB Global Market Activity RLB Global Market Activity RLB Global Market Activity
Peak Zone Sector Mid Zone Sector Trough Zone Sector
CIVIL 17% HOUSE 13% CIVIL 15% HOUSE 18% CIVIL 12% HOUSE 10%
APARTMENTS 12%
APARTMENTS 23% APARTMENTS 13%
HOTEL 17% HOTEL 12% HOTEL 15%
RETAIL 17% OFFICES 16%

RETAIL 13% OFFICES 10% RETAIL 13% OFFICES 15%
INDUSTRIAL 7% INDUSTRIAL 14% INDUSTRIAL 18%
10
KPMG, Sydney, Australia
Client: Lend Lease

Interior Designers: Davenport Campbell / EGO
MARKET data
Key economic data
AUSTRALIA 2014 2015 2016 (f) 2017 (f) 2018 (f) 2019 (f)
GDP 2.6 % 2.5 % 2.5 % 3.0 % 3.0 % 2.9 %
GDP per capita AUD $67,893 $68,413 $68,903 $69,778 $70,703 $71,601
Exchange Rate (As at 1 July per US$) 1.230 1.372 1.315 1.334 1.349 NP
PPP Rate 1.455 1.431 1.431 1.437 1.444 1.447
Inflation 2.5 % 1.5 % 2.1 % 2.4 % 2.5 % 2.5 %
Unemployment 6.1 % 6.1 % 5.9 % 5.8 % 5.7 % 5.7 %
CHINA 2014 2015 2016 (f) 2017 (f) 2018 (f) 2019 (f)
GDP 7.3 % 6.9 % 6.5 % 6.2 % 6.0 % 6.0 %
GDP per capita CNY 40,494 43,074 45,643 48,233 50,874 53,660
PPP Rate 3.567 3.527 3.506 3.485 3.458 3.441
Inflation 2.0 % 1.4 % 1.8 % 2.0 % 2.2 % 2.6 %
Unemployment 4.1 % 4.1 % 4.1 % 4.1 % 4.1 % 4.1 %
NEW ZEALAND 2014 2015 2016 (f) 2017 (f) 2018 (f) 2019 (f)
GDP 3.0 % 3.4 % 2.0 % 2.5 % 2.5 % 2.2 %
GDP per capita NZD $47,243 $47,849 $48,404 $49,199 $50,007 $50,708
PPP Rate 1.480 1.463 1.476 1.476 1.478 1.478
Inflation 1.2 % 0.3 % 1.5 % 1.9 % 2.0 % 2.0 %
Unemployment 5.8 % 5.8 % 5.9 % 5.8 % 5.8 % 5.7 %
SINGAPORE 2014 2015 2016 (f) 2017 (f) 2018 (f) 2019 (f)
GDP 3.3 % 2.0 % 1.8 % 2.2 % 2.5 % 2.7 %
GDP per capita SGD $70,139 $70,704 $71,332 $72,324 $73,494 $74,839
PPP Rate 0.848 0.853 0.854 0.847 0.840 0.832
Inflation 1.0 % -0.5 % 0.2 % 1.3 % 1.9 % 1.9 %
Unemployment 2.0 % 1.9 % 2.0 % 2.0 % 2.0 % 2.0 %
SOUTH AFRICA 2014 2015 2016 (f) 2017 (f) 2018 (f) 2019 (f)
GDP 1.5 % 1.3 % 0.6 % 1.2 % 2.1 % 2.4 %
GDP per capita ZAR R 55,725 R 55,460 R 54,926 R 54,719 R 54,974 R 55,412
PPP Rate 5.369 5.516 5.795 6.068 6.286 6.505
Inflation 6.1 % 4.6 % 6.5 % 6.3 % 5.6 % 5.6 %
Unemployment 25.1 % 25.4 % 26.1 % 26.7 % 26.9 % 27.0 %
Notes:
Forecasts for years after 2015.
Exchange rates are quoted as currency units per U.S. dollar
Euro Area composed of 17 countries: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,
Malta, Netherlands, Portugal, Slovak Republic, Slovenia, and Spain.
Asean-5 composed of 5 countries: Indonesia, Malaysia, Philippines, Thailand, and Vietnam.

12
MARKET data
Key economic data
UNITED KINGDOM 2014 2015 2016 (f) 2017 (f) 2018 (f) 2019 (f)
GDP 2.9 % 2.2 % 1.9 % 2.2 % 2.2 % 2.1 %
GDP per capita GBP 27,087 27,483 27,799 28,221 28,646 29,065
Exchange Rate (As at 1 JULY per US$) 0.644 0.675 0.706 0.703 0.699 NP
PPP Rate 0.700 0.696 0.698 0.701 0.701 0.700
Inflation 1.5 % 0.1 % 0.8 % 1.9 % 2.0 % 2.0 %
Unemployment 6.2 % 5.4 % 5.0 % 5.0 % 5.1 % 5.3 %
USA 2014 2015 2016 (f) 2017 (f) 2018 (f) 2019 (f)
GDP 2.4 % 2.4 % 2.4 % 2.5 % 2.4 % 2.1 %
GDP per capita USD $50,016 $50,836 $51,619 $52,457 $53,243 $53,913
Exchange Rate (As at 1 JULY per US$) 1.000 1.000 1.000 1.000 1.000 1.000
PPP Rate 1.000 1.000 1.000 1.000 1.000 1.000
Inflation 1.6 % 0.1 % 0.8 % 1.5 % 2.4 % 2.5 %
Unemployment 6.2 % 5.3 % 4.9 % 4.8 % 4.8 % 4.9 %
Latin America and Caribbean 2014 2015 2016 (f) 2017 (f) 2018 (f) 2019 (f)
GDP 1.3 % -0.1 % -0.5 % 1.5 % 2.1 % 2.6 %
GDP Per Capita (Int $) 15,434 15,377 15,259 15,519 15,990 16,574
Inflation 4.9 % 5.5 % 5.7 % 4.3 % 4.1 % 3.9 %
EURO AREA 2014 2015 2016 (f) 2017 (f) 2018 (f) 2019 (f)
GDP 0.9 % 1.6 % 1.5 % 1.6 % 1.6 % 1.6 %
Exchange Rate (As at 1 July per US$) - EURO 0.822 0.915 0.873 0.861 0.846 NP
PPP Rate N/A N/A N/A N/A N/A N/A
Inflation 0.4 % 0.0 % 0.4 % 1.1 % 1.3 % 1.5 %
Unemployment 11.6 % 10.9 % 10.3 % 9.9 % 9.6 % 9.2 %
MIDDLE EAST & NORTH AFRICA 2014 2015 2016 (f) 2017 (f) 2018 (f) 2019 (f)
GDP 2.6 % 2.3 % 2.9 % 3.3 % 3.4 % 3.6 %
Inflation 6.6 % 5.9 % 5.5 % 4.7 % 4.4 % 4.0 %
Asean-5 2014 2015 2016 (f) 2017 (f) 2018 (f) 2019 (f)
GDP 4.6 % 4.8 % 4.8 % 5.1 % 5.2 % 5.3 %
Inflation 4.6 % 3.3 % 2.8 % 3.5 % 3.5 % 3.6 %
South America and Carribean composed of 32 countries: Antigua and Barbuda, Argentina, The Bahamas, Barbados, Belize, Bolivia,
Brazil, Chile, Colombia, Costa Rica, Dominica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras,
Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, Trinidad
and Tobago, Uruguay, and Venezuela.
Middle East and North Africa composed of 20 countries: Algeria, Bahrain, Djibouti, Egypt, Iran, Iraq, Jordan, Kuwait, Lebanon, Libya,
Mauritania, Morocco, Oman, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, United Arab Emirates, and Yemen.
Sources : RLB, IMF, Scotiabank
13
Podium at Menlyn, Pretoria, South Africa
Client: Emira Property Fund

Architect: Architects: Boogertman + Partners
14
Location Intelligence
Sub Saharan Africa

Sub-Saharan Africas 2015 growth was subdued after more
than a decade of solid growth as reported by the IMF, 2016 escalation
however in 2016 it is forecasted to recover quite moderately.
GDP has slowed from 4.6% in 2014 to 3.7% in 2015, the
lowest since 2009. GDP is expected to recover during 2016
increasing to 4.6 %. 2015 showed a decline in growth rates for
Sub Saharan Africa amid weak global economic conditions,
while considerable variation within regions did not stop some
countries from posting solid growth.
Commodity prices have remained persistently low, mostly
due to robust supplies and lower demand. Following some
recovery in the Q2, oil prices plunged again, dropping below
Regional market activity
US$40 per barrel. Prices of copper and iron ore, two of the Sectors per Zone
regions main metal exports, fell by about 25% and 40%,
respectively. As a net commodities exporter, Africa is deeply
affected by falling commodity prices. 10
The South African economy is forecast to grow modestly
in 2016 at 1.4% compared with 1.3% in 2015. This revised
forecast is substantially slower than the 2.1% growth forecast
in June. The low commodity prices, particularly with oil, which 9
fell 67% from June 2014 to December 2015, have affected 16
engineering and mining contracts. South Africa was also
hit by lower platinum, iron ore and coal prices. Four of the
countrys largest construction companies have reduced their
staff by more than 20,000 jobs over the past two years, with
Peak MID trough
executives saying more are likely amid a domestic economic Zone Zone Zone
slowdown.
The Q1 2016 saw construction tender competition intensify,
as activity within the sectors project output rate was slow.
The low output of projects was in line with lower public sector
capital expenditure and continuing weak growth in private
sector capital expenditure.
Africa is experiencing radical modernisation in various
pockets. Most low-income countries are expected to
continue to grow at a faster pace, supported by large-scale
infrastructure investment and consumer spending.
As of March 2016, the World Bank Group approved US$4.27
billion in lending for Sub Saharan Africa for 51 projects.
Support included US$3.8 billion in International Development
Association commitment for 44 projects and US$570 million in
International Bank for Reconstruction and Development loans
for 7 operations focusing on infrastructure.
Consumer confidence remains steady with increased
infrastructure being offset by vulnerability of price shocks
and the slowdown of Chinas economic growth and import
expenditure.
15
Westcon Warehouses and Of ces, Waterfall Logistics Precinct, Midrand, South Africa
Client: Atterbury Property

Architect: Empowered Spaces Architects
16
Sub Saharan Africa
Cape Town Johannesburg & Pretoria Port Louis (Mauritius)

Cape Towns construction market Johannesburg and Pretoria will Mauritius economy is forecasting
is showing signs of slow growth in experience slow growth in their sound growth in GDP of 3.8% for
2016 alongside a lack of government local economies due to a cut in 2016 and 3.6% in 2017. The increases
projects and persistently low government expenditure alongside have been driven by the information,
commodity prices. fiscal balances. The World Bank communications, and technology
has released a report revising the sectors.
Western Capes residential sector
growth forecast to just 0.8% for
looks promising as Cape Town is The slower performance of the
Johannesburg this year.
seeing an increase in residential construction sector, which declined
building plans approved, this South Africa's construction sector for a second consecutive year by
however was offset by a decrease is experiencing a sluggish period 4.3%, offset some of the positive
in non-residential building plans of growth as business sentiment gains within other sectors. During Q4
approved. Residential building has been heavily eroded, which we 2015 no change was registered in the
completions have also increased expect will lead to significant cuts to labour, hire of plant and transport
however once again offset by a non- capital expenditure over 2016 and sub-indices.
residential decrease. 2017.
The Minister of Public Infrastructure
The new district at the Victoria & A high-budget city development believes that the key to boosting
Alfred Waterfront, is estimated labelled The East Capital, is taking Mauritius construction sector is
at R700 million, which will see a place east of Pretoria in Hazeldean. centred on establishing upcoming
corporate head office for British The R44 billion project comprises a infrastructure projects and improved
American Tobacco South Africa as 100,000m2 mall, along with housing, training of those employed in the
the first project in this mixed-use business, manufacturing, leisure industry.
area. Totalling 75,000m the mixed- facilities. The East Capital will be
In line with the governments vision
use Canal District straddles both accessed off the N4, leading to the
of increased construction there have
sides of Dock Road. The project development of a new R90 million
been quite a large number of projects
is designed to meet the 5 star road known as Hazeldean Boulevard.
released for 2016. New developments
green rating and is expected to be Construction of Hazeldean Boulevard
totalling more than R12 billion
complete in November 2016. is scheduled over a 12 to 18 month
include: Flyovers, highway ramps
period and a welcome addition to the
Demand for commercial space at and interchanges at Jumbo Phoenix,
local economy.
the Victoria & Alfred Waterfront Phoenix Beverages and the Dowlut
is driving development in this There is currently increased interest round-about, the second phase of the
district. This district is also a piece in investing in Hazeldean; comprising Port Louis Ring Road, construction
in the jigsaw puzzle that provides a of commercial, businesses, retailers, of roads and a bridge at Coromandel,
seamless link through to the Cape educational and hospitality sectors. 256 housing units, as well as a new
Town International Convention Additionally, the Menlyn Main control tower and a new parking
Centre and Cape Towns CBD precinct is set to undergo a R8 billion area for wide-bodied aircrafts at the
according to the CEO of V & A redevelopment becoming Africas airport.
Waterfront. Additionally, Blue Rock first green city. The Menlyn Maine
The construction industry is
Resort located in Somerset West has precinct has been in development
showing potential to develop
construction plans of redevelopment, since 2010, with the retail component
growth with a Memorandum of
with an estimated value of R14 billion. of the project expected to be
Understanding (MOU) between
The development compromises of complete by September 2016.
the Road Development Authority
1,000 luxury apartments to be built
The first phase of the R6.2 billion (RDA) and the Korea Expressway
on 40 hectares of land.
Leratong City integrated nodal Corporation signed in April 2016.
development, situated across the Aiming to provide close collaboration
road from the existing Leratong and cooperation in the field of
Hospital, west of Johannesburg, construction and maintenance of
has commenced. The project roads, bridges and tunnels. The
will eventually consist of 15,000 MOU is part of the implementing
residential units, an intermodal the Road Decongestion Program.
transport hub, a government precinct Once commenced this should give
as well as a 30,000m regional mall. an increased pipeline of work in the
short to medium term for Mauritius.
17
University of Massachusetts Champions Center, USA
Client: JCJ Architecture

Architect: JCJ Architecture
18
AMERICAS
Americas economy continues to show signs of stable growth,
as the countrys GDP is forecast to increase from 1.8% to 2% 2016 escalation
between third quarter 2016 and 2020. Falling energy prices
and a strong dollar have assisted the market in restraining
inflation through 2015 and into 2016.
In 2016, the construction industry in the United States is
generally in the best shape that it has been since the depths
of the financial crisis. Construction unemployment is down
to 4.5%, close to economic full employment and activity is
up in virtually all areas with the possible exception of the oil
centres.
Housing construction has finally returned to an equilibrium
with construction activity matching population driven
demand. Interestingly, while construction of single family
homes represented about 2/3rds of new housing in the years
2000 through 2011, by 2015 the number of single family units
and 5 or more multi-family units was roughly the same.
There are a variety of theories that have been advanced to
explain this trend including a general move towards urban Regional Relativities
core living, rising rents / affordability, and life style. Cities Q32016
Honolulu 190
According to the U.S. Department of Commerce, construction New York 187
put-in-place during June 2016 was estimated at a seasonally San Francisco 164
adjusted annual rate of $1,133.5 billion, which is 0.6% below Boston 159
the revised May estimate of $1,140.9 billion. The June 2015 Chicago 154
Washington DC 150
figure is .3% above the June 2013 estimate of $1,130.5 billion.
Los Angeles 143
The value of construction for the first six months of this year Seattle 123
was $539.8 billion, 6.2% above the same period in 2015. Portland 112
Denver 106
In December of 2015 there was a 0.25% increase in interest
Phoenix 105
rates which is unlikely to dampen activity in the construction Las Vegas 104
industry, moreover developers and investors are cautious
when considering the longer term outlook. Future
construction costs are trending upwards due to the volume of Regional market activity
construction work, shortage of skilled labour, and fluctuating Sectors per Zone
material prices.
Prices for steel products showed particular weakness with the 31
indexes for fabricated structural steel and carbon steel pipe
falling. The current labour shortage has more than offset the
weakening material price as the subcontractor labour index,
reported by HIS, registered 49.1 in September 2016, moving 110 111
the index back below the neutral mark.
Peak MID trough

Zone Zone Zone
19
AMERICAS
BOSTON Honolulu
Bostons economy continues to Hawaiis economic climate is The residential sector also continues
show strong signs of growth with expected to remain relatively stable to look favorable with D.R Hortons
unemployment rates decreasing to through 2017. Hawaii is anticipating Hoopili project on the Ewa plain
under 4% and population is rising with advances in the national and global imminent together with projects
an expected growth of 3% through economies, leading to a tourism at Kakaako, Parklane, West Oahu,
the year 2020. With population on increase, a prosperous labor market, KoOlina and several on the Big Island.
the rise, companies such as GE are and growth of personal income and
Tender prices for Hawaii have
relocating to downtown Boston to tax revenues.
been on a downward trend since
tap into the potential pool of new
According to the Department of the substantial increases of 13.3%
talent. Bostons housing market also
Business, Economic Development & and 11.2% over 2014 and 2015
correlates to the population growth
Tourism, Hawaiis overall real GDP respectively. As construction
and continues to be in high demand
is expected to increase by 1.8% in becomes much more competitive
with a projected 30,000 units being
2016 and the consensus forecast tenders generally are expected to
added by the year 2020.
predicts an overall 2.3% growth in tighten and expected to remain
Relocation of both businesses and 2017. Unemployment in Hawaii has stable through 2017 with a TPI
residents to the area continues to remained significantly low projecting forecast of 4.0%.
bolster the market. Construction to be 3.2% in 2016 and continues
jobs in Boston are in demand with to show signs of decreases. June
an increase of 10% employment from 2016 y-o-y numbers highlight an
2015. unemployment decrease from 3.8% to
3.2%, ranking Hawaii the 4th lowest in
A common theme taking place
the nation.
throughout the Boston construction
market is the reuse of older Visitor arrivals are expected to
buildings through a regenerative grow by 2.5% in 2016 and expected
process. Neighbourhoods such as to increase 1.7% in 2017. Personal
Bostons Seaport District are being income has shown strong signs
transformed from old manufacturing of growth with the current dollars
buildings into high end work expecting to increase 4.8% and 5.0%
spaces and hotels. In an effort to in 2017.
breathe new life into deteriorating
The constantly improving economic
neighbourhoods, residential buildings
performance of Hawaii corresponds
such as Millennium Tower in Bostons
with growth of the construction
downtown area, are being built
market, demonstrated by a variety
to attract tourists, businesses and
of projects underway in numerous
residents alike.
sectors. The tourism related sector
Noteworthy construction projects has remained a primary cause of
in the Boston area include GEs construction with projects including
headquarters, the Hub at Causeway, the Hilton Garden Inn, International
Millennium Tower and One Dalton. Market Place, Hilton Hawaiian Village,
Turtle Bay and Outrigger Reef.
20
AMERICAS
Los Angeles Phoenix

Los Angeles economy has Mixed use development projects Economic growth in Arizona
experienced strong signs of increased are also prevalent in Los Angeles accelerated last year, with overall
growth, with unemployment rates including projects such as the employment increasing 2.6% for the
continuing to decrease, personal Blossom Plaza, City market, Herald State, an increase over the 2.0% gain
income sustaining an upward trend Examiner Renovation, La Plaza in 2014. Early indicators in 2016
and continued population growth. Cultura Village, Medallion 2.0, suggest the possibility of stronger
Metropolis, Oceanwide plaza, The gains this year, with Statewide
This correlates with Los Angeles
Grand, and Wilshire Grand Centre. employment increasing faster than
experiencing growth within the
the national rate. From the first
construction sector, shown by the Additionally, both the civic and non-
quarter of 2015 to the first quarter
increase of new building permits profit sectors are also experiencing
of 2016, Arizona has added 81,300
since 2010. The outlook for the a variety of new projects, including
jobs with many of the job gains
industry is set to outpace the rest of Arts District Park, Budokan of Los
in education and health services;
the nation over the next five years Angeles, Chinatown Park, Federal
professional and business services;
with house prices, employment, Courthouse, Figueroa Corridor
trade, transportation, and utilities;
income and population growth Bikeway, First and Broadway Park,
and financial activities.
culminating in an upward trend. and The Century Plaza Hotel.
LA will continue its growth for the The state is forecast to add
Construction is also underway
coming years. approximately 78,600 jobs in 2016
in Inglewood, with a sports and
and to sustain that pace through
The residential construction sector entertainment complex including
2018. Leading sectors during the
remains strong in both the apartment office, retail, public parks, hotel,
next three years are expected to be
and condominium market with 14,752 movie theatre, and an 80,000-seat
similar to recent years but will also
units in the pipeline for downtown stadium. Practical completion is
include construction. Gains within
Los Angeles alone and 11,000 expected by 2019.
construction activity reflect stronger
currently under construction. House
Construction remains strong in both residential housing construction
price increases continue to be a major
the inner CBD and downtown LA activity, with total housing permits
input contributing to Los Angeles
as construction cost escalation is rising from 31,850 in 2015 to
economic growth. A recent Home
predicted to increase 5.4% for 2016. approximately 47,000 in 2018.
Price Index highlights the constant
The Residential and commercial
growth observed in house prices. The In the past 5 years Phoenix has
construction sectors are showing
index indicates a growth of 48% from experienced a consistent increase in
no signs of slowing down. The
June 2012 to June 2016. home prices, highlighted in a recent
abundance of current projects is
home price index showing over a
Significant projects either under creating a pipeline of work that will
40% increase from June 2012 to June
construction or preconstruction in continue into the near future. Despite
2016.
the residential sector of downtown recent turmoil in the financial markets
Los Angeles includeFig Central, Circa, and slowing growth in China, the Los Phoenix has shown continuing
Oceanwide LA Plaza, AMP Lofts, Angeles construction market and growth in construction escalation
Broadway and Olympic condos, Da economy as a whole is predicted to rates, with RLBs cost index
Vinci and Fourth & Broadway. continue its strong growth through to highlighting quarterly growth rates
2020. of 0.80%, 0.98%, 0.88% and 1.02%
respectively over 2015. Forecasted
economic improvements correlate
to an anticipated construction cost
escalation growth rate at 4.4% for
2016 and 4.3% for 2017.
21
AMERICAS
Portland
Oregons economy continues to due in part to the aging workforce The health sector has added a 1,672
strengthen, with the states real and the need for replacement square meter cancer treatment
GDP growing at an annualised rate construction workers due to baby facility at the Columbia Memorial
of 3.9% for the first quarter of 2016 boomer retirements. The construction Hospital in Astoria which will be
over the fourth quarter of 2015. The market remains strong amongst completed and ready for patients
strengthening economy continues to almost all sectors with an emphasis in early 2017. The educational
provide new jobs through a variety on apartments and hotels. sector has seen Open Meadow, a
of sectors, particularly construction. US$4.4 million school and Clatsop
Within the construction market, the
This increase of labour is emphasised Community College Patriot Hall,
residential sector has continued its
by growing employment numbers a US$12.0 million redevelopment
recovery after the global financial
and decreasing unemployment rates. project with a practical completion
crisis. Forecasts suggest that
date of September 2016. The
Personal income is showing slow Portland will add 123,000 new
hotel sector remains active with
signs of growth, however it is housing units between 2010 and
several boutique hotels as well as
continuing the upward trend. 2035. Of the new housing units,
conventional hotel developments
November 2015 recorded the highest 94,000 which make up three-quarters,
underway, including the Porter
tally of jobs added in a single month are projected as apartments or
Hotel. In January 2015 the Porter
since November 1996. The monthly condos. With an influx of apartments
hotel was issued a building permit,
total of 9,600 new jobs makes up for the residential market is expected to
the 299-rooms, 17 storey hotel is
more than a 6th of the 60,400 jobs see rapid growth as well as change. In
currently under construction and is
added during 2015s yearly figures. 2010 roughly 60% of all existing units
expected to create a pipeline of work
Unemployment rates continuing the were single-family homes, by 2035
until late 2017.
downward trend to a current 4.8% in that figure is forecast to dramatically
June 2016 down from 5.8% in June reduce to 47%. Construction costs are forecast to
2015. New jobs are being focused rise approximately 4.6% for 2016 and
within the construction industry continue this steady trend to 2018.
22
AMERICAS
San Francisco
San Franciscos GDP is currently House prices are continuing to rise having hit the marketplace and many
growing at 4.3% through 2016, with as the median house costs US$1.3 more thousands in the 5-year pipeline
construction, employment, house million and the median condominium coming online. As of April 2016, the
prices and population all on the rise. US$1.1 million, 65% more than at number of condominium listings is
As San Francisco experiences growth the peak of the property bubble in up over 40% on a y o y basis. Interest
across numerous sectors consumer 2008. Current house prices have rates continue to remain close to the
confidence continues to increase, more than doubled since January 2013 historical low
laying a foundation for further growth 2012. To meet the heavy demand
The Transbay Terminal is a major
in the short to medium term. of residential construction there is
project redevelopment. The multi-
a large pipeline of work over the
San Francisco is experiencing billion dollar, 20-year transformation
future periods with three major mega
continued growth in the job market will include urban housing, exciting
projects being: Parkmerced (5,700
with the unemployment rate at March retail and entertainment venues,
units), Hunters Point which includes
2016 at 3.8%, declining 0.7% from commercial spaces, and 326 acres of
the contaminated Navy shipyards
same period in 2015. Employment park land.
(10,300 units), and Treasure Island
has risen uninterrupted since 2009
(7,800 units).
and does not show signs of slowing
down, San Francisco has seen 97,000 The market for condominiums may
jobs added over 2015. Employment finally be reaching oversupply as
in the architectural, engineering, and the high demand highlighted by
related services in San Francisco have thousands of new condominiums
increased consistently since 2012.
Oregon State University Valley Football Centre, USA
Client: HNTB
Architect: HNTB
23
Supermal Pakuwon Indah, Surabaya, Indonesia
Client: PT Pakuwon Permai
Supermal Pakuwon Indah 3

Architect: DP Architects Pte Ltd (Singapore)
PT. Airmas Asri (Indonesia)
Supermal Pakuwon Indah 4

Architect: PT. Design Global Indonesia (Indonesia)
24
ASIA
Economies in emerging Asian countries are strengthening,
and improvements in sovereign balance sheets and positive 2016 escalation
demographic outlooks point to a long-term growth story.
In these emerging markets, there is strong demand for
infrastructure projects. Many factors are leading the
demand for infrastructure within the region. These include:
general rises in the standard of living, economic growth and
urbanization. Coupled with increases in population that is
increasing the demand for residential projects, strong increase
in the number of significant roads and transport projects are
being seen.
Asias GDP growth in 2015 was 5.4% according to the IMF and
forecasted to retract slightly to 5.3% during 2016. This has
in part been caused by a slowdown in China, described as
rebalancing by the IMF and below forecasted growth in Japan.
The pace of growth in Chinas construction industry is Regional Relativities
estimated to have dropped to 5.2% in 2015, down from Cities Q32016
6.8% in 2014 and 9.5% in 2013. However, it is not expected Hong Kong 164
to fall sharply in 2016 and 2017, as the authorities attempt Macau 137
to support the economy through an acceleration in public Singapore 108

Beijing 89
investment programs. Infrastructure projects should also see
Shanghai 84
that the Philippines, Malaysia and Indonesia continue to post
Guangzhou 82
healthy rates of growth in construction output. Construction Shenzhen 79
and infrastructure activity in Malaysia has grown due to the Kuala Lumpur 74
implementation of the 10-year economic plan, the 2011- Ho Chi Minh City 67
Jakarta 57
20 Economic Transformation Program (ETP). The private
sector is showing increased confidence in the governments
ability to carry out the ETP, and as such there is more foreign
investment in the local market. Regional market activity
Sectors per Zone
Indonesia, Philippines and Vietnam will be key emerging
markets over the next ten years, offering both significant
scale and strong growth. While some smaller countries will 37
grow at a faster rate, they will lack comparable scale and
have significantly higher risk to the regions more established
markets in China, Japan, Malaysia, Hong Kong and Indonesia.
20
34
Peak MID trough

Zone Zone Zone
25
ASIA
Beijing Chengdu
Beijings GDP growth rate retracted In July 2015, Beijing together with According to Chengdus official
to 6.9% y o y in Q4 2015 in line with Zhangjiakou won the bid to host statistics, Chengdus total GDP in
the national GDP growth rate and the 2022 Winter Olympic Games. 2015 was over RMB 1,080 billion;
was 0.2% point higher than that in Though most of the construction an increase of 7.9% compared to
Q3 2015. Fixed assets investment will be carried out in Zhangjiakou, a 2014, and was 1.0% point higher than
grew 5.7% y o y while the Consumer 12,000 seat National Speed Skating the national GDP growth rate. The
Price Index recorded a mild increase Gymnasium will be built in Beijing on Consumer Price Index (CPI) increased
of 1.8% y o y. Despite the overall the west side of the Olympic Green 1.3% on a y o y basis, which was 0.2%
economic slowdown, Beijings service and south of the Olympic Green point lower than the same period in
sector has grown steadily. Being the Tennis Centre. 2014.
regional business hub in Northern
The construction of Beijing Daxing In 2015, the Chengdu government
China, the rapid growth of the finance
International Airport and Beijing cancelled the property purchase
industry has been providing strong
Universal Studio are at full speed restrictions, decreased the mortgage
support to the economy of Beijing.
and scheduled to be completed down payment limit, raised the level
In 2015, Beijing imposed a ban on in September 2019 and 2020 of provident fund loans and adopted
new large-scale public developments respectively. many other favourable policies
in the central area of the urban to support the property market,
The prices of major construction
district aiming to reduce urban resulting in an increased turnover.
materials have kept on going down
density in Beijings central areas
and contractors are willing to offer The turnover of Chengdus land
and to shift non-essential functions
discounts due to less projects purchase was 15,039 acres, an
out of Beijing into areas such as the
available in the market. increase of 18.31% as compared with
Tongzhou District. It is expected
2014. The "Sichuan Tianfu Xinqu
over the next few years, growth in Tender prices in Beijing have been
district master plan" was adopted at
Beijings real estate market will be on a downward trend since Q2 2015.
the end of 2014. Shuangliu County
driven by developments in emerging The downward trend is likely to
which is a major area in the national
areas. This is creating faster growth continue in the coming months. TPI
district of Tianfu Xinqu has become
in these emerging areas and in turn index highlights growth forecasted in
a district and incorporated into the
improvements to the infrastructure. 2016.
Tianfu Xinqu formally as of December
In 2015 alone, two new subway lines
2015 and is expected to upgrade and
began operations and nine more
perfect the facilities of the region.
began construction.
Due to serious over supply and
According to the "13th Five-
a weak demand, the prices of
year Plan", Beijing will increase
construction materials continued
the construction of infrastructure
to decline in 2015. Ready-mixed
starting 297 major projects in
concrete prices fell by 6%, and steel
Tongzhou District to speed up the
prices fell by 27% over 2015. The
pace of urbanization including the
overall level of prices of building
construction of a fully functional sub-
materials fell 3% compared with 2014
centre. The sub-centre will spatially
and was the lowest in five years.
support and functionally complement
The average labour wages were
the city centre while being a relatively
relatively stable in 2015, rising 2%, as
independent Central Business District.
compared with 2014. Overall tender
Moreover, Tongzhou is adjacent
prices fell correspondingly in 2015
to Langfang and Tianjin, which are
and are expected to continue to fall
important transport corridors of
moderately in 2016. Increased by
the Bohai Sea. As a result, building
0.3% in 2015 and are expected to
the sub-centre in Tongzhou will
drop 1.10% in 2016.
greatly increase Beijing-Tianjin-Hebei
(Jingjinji) connectivity and the joint
developments in Jingjinji areas.
26
ASIA
Guangzhou Hong Kong

Guangzhou's economy grew 8.4% In an effort to forge the city as an Hong Kongs economic growth
y o y in end 2015 picking up slightly electronic commerce business hub continued to weaken and only
since the beginning of 2016. in China, the local government has grew moderately by 1.9% y o y in
Consumer price inflation resumed a planned to develop a new CBD real terms in Q4 2015, compared
rising trend and remained moderate designated for headquarters of with the 2.2% increase in Q32015.
at 1.7% in Q4 2015 on a y o y basis. leading E-commerce enterprises. Overall consumer prices rose by
The planned scale of the district was 2.7% in January 2016 over the same
As property developers became
unveiled to be as large as 3 million month a year earlier. The seasonally
more wary about the economic
square metres of built gross floor adjusted unemployment rate and
outlook, the pace of development
area. 14 land parcels out of a total of underemployment rate stood at 3.3%
had been losing momentum. Gross
19 have been sold, buyers of which and 1.4% respectively in November
area of developments commencing
are all leading Chinese companies 2015 to January 2016.
construction in end of 2015 saw a
in the E-commerce sector including
decline of 0.3% compared with end of According to RLBs Tender Price
names such as Tencents and Alibaba.
2014. Index, which measures tender price
According to the land leases, all
movements of builders works in the
In response to the prolonged these developments are required
private sector in Hong Kong, there
weakening of the property market to commence construction almost
was an increase of 0.8% in tender
which was a crucial driver of the simultaneously in 2016.
prices in Q4 2015. On a y o y basis,
economy, the Central Government
Thanks to the glut of steel demand the increase was 4.3%.
has recently implemented various
resulting from the economic
stimulus measures such as lowering The construction industry in Hong
downturn, steel prices have been
transaction taxes and reducing Kong recorded strong output during
falling substantially. Compounding
the minimum down payment 2015. However, there have been
this with the anaemic property
requirements for house purchases to doubts that such high output could
market has dragged down the tender
prop up the market. However these be sustained in the coming years
prices which saw a magnitude of up
measures were not extended to the as there are uncertainties in both
to 5% fall in 2015. With a marginally
first-tier cities, where there was no the global and regional economies.
positive outlook for the property
pressing need to clear inventory. The gradual completion of major
sector and material prices to become
Although Guangzhou, a first-tier city, infrastructure projects in Hong
relatively stable, tender prices are
did not benefit from the measures, Kong and the gaming developments
expected to fluctuate within a narrow
the policies gave a clear message of in Macau has resulted in more
range in 2016.
the supportive attitude of the Central contractors being willing to submit
Government towards the property competitive bids in order to maintain
sector, which in turn has boosted their order books.
the property investment sentiment in
The continual weak material prices
general.
have helped to keep the construction
cost from rising as rapidly as in the
past few years. However, since the
shortage of skilled workers has yet to
be resolved, and with the expectation
that the Legislative Council will
approve funding for over 70 capital
work projects in the next few months,
it is unlikely that there will be a
significant decline in construction
cost in the near future. The most
likely trend is that there will only
be moderate fluctuations in tender
prices this year.
27
ASIA
Ho Chi Minh City Jakarta

Vietnams economy in 2015 As the country attracts more trade GDP in 2015 expanded 4.8%, but fell
continued its steady growth from opportunities as well as tourism, short of the target of 5.7% set in the
2014 and emerged as the best there is an urgent need for a state budget. The global slowdown,
performing economy in the Southeast new airport in the Ho Chi Minh weak domestic consumption, weak
Asia region. The overall GDP in 2015 metropolitan area. The recently investments and exports as well
expanded 6.7% and exceeded the approved Long Thanh International as the removal of most of the fuel
governments expectation of a 6.2% Airport (LTIA) project will be located subsidies underpinned the growth
expansion. The construction sector 43km from Ho Chi Minh City and for 2015. While its economic growth
expanded 10.8%, the highest in five construction works will span over remained among the highest in
years. a period of 34 years (2016 2050) emerging market economies at
in three main phases at a budget 4.8% in 2015, it was also its weakest
Due to weak oil prices CPI increased
of US$16.03 billion. Phase 1 is performance in 6 years despite
0.63% y o y in December 2015,
scheduled for completion by 2025 to a modest pick-up in Q4 2015.
marking its lowest level since 2001.
help reduce traffic congestion from Inflation fell to 3.1% y o y in 2015 and
Vietnam officially joined the Trans- the current Tan Son Nhat Airport. remained within its target range of
Pacific Partnership (TPP) in February It will eventually take over as the 3.0%-5.0%.
2016. The World Bank projects that lead airport in Vietnam upon its full
For 2016, the central bank expects
the countrys GDP might improve by completion.
the economy to expand between
an additional 8.0% over the next 20
The residential market is anticipated 4.2% and 5.6% while keeping inflation
years. The government is optimistic
to have an additional 57,000 below 4.0%.
and is projecting the economy to
apartments completed by the end
grow between 6.5% and 6.9% in 2016. The construction sector's GDP
of 2016. The office market stayed
contribution increased to 16.1% y o y
According to the Foreign Investment subdued in 2015 with only one new
in 2015. Government capital spending
Agency, the total FDI in 2015 Grade A building (Vietcombank
was accelerated in H2 2015 and a
amounted to US$22.8 billion, with Tower) in Ho Chi Minh City. In 2016,
coordinating body, the Infrastructure
Singapore, Republic of Korea, the supply for office buildings are
Priorities Development Acceleration
Malaysia and Japan being the some projected to rise as demand from
(KPPIP) was set up to focus on top
of the largest investors. The Ministry foreign companies will spur take-
priority projects. The government
of Planning and Investment reports up, given the current momentum of
increased its budget allocation for the
an accelerated pace of construction economic recovery and increasing
infrastructure sector in 2016 to 290
for FDI and non-FDI driven projects FDI into the city. Industrial properties
trillion rupiah (US$22 billion), making
across cities and provinces. are expected to see steady growth
it the biggest infrastructure allocation
along with more multinational
Schneider Electric has begun in Indonesias state budget history
corporations opening and expanding
construction on the first phase of thus far.
manufacturing facilities in Vietnam
its new plant in Saigon Hi-Tech
to take advantage of the TPP The joint venture between an
Park (SHTP) in January 2016 while
Agreement and other trade benefits. Indonesian consortium of four state-
Samsung has doubled its investment
owned companies and China Railway
for upgrading works in its existing hi- Barring any unforeseen market
International Co. Ltd is expected
tech complex in the same city. conditions, building tender prices in
to commence construction of the
Ho Chi Minh City are anticipated to
The authorities have set aside Jakarta-Bandung rail in Q2 2016 after
increase by between 3.0% and 6.0% in
US$5.54 billion for transport and a two-month delay due to permitting
2016.
infrastructure projects through 2020. and concession trouble. This would
Works on the citys first metro line become Southeast-Asias first high-
linking Districts 1 Ben Thanh Market speed rail service. The rail spans
and District 9s Suoi Tien Theme Park 142.3km, costs about 76,203 billion
are currently underway and should be rupiah (US$5.7 billion) and is slated
fully operational by 2020. for completion in year 2019.
28
ASIA
Kuala Lumpur
Existing construction work in Jakarta Malaysia's GDP came in at 4.5% in The 11th Malaysia Plan (11MP)
includes the International Financial Q4 2015, slower than the 4.7% in reaffirmed the strong pipeline of
Centre Jakarta Tower Two. The the preceding quarter. The overall construction jobs till 2020 with
project is slated for completion in Q1 economic growth for 2015 managed RM83 billion worth of infrastructure
2016. The 48-storey building will offer to perform within the governments jobs to be awarded in 2016. The
about 50,200m2 of office space upon revised GDP forecast of 4.5% to Construction Industry Development
completion. The tower is one of 12 5.5% as it slid to 5.0% from the 6.0% Board (CIDB) expects growth to
office projects under way in the CBD achieved in 2014. Domestic demand moderate to 10.3% in 2015 and 7.16%
as of end-2015. helped to offset the slumping oil in 2016 following the average annual
prices and commodity prices. growth of 13.5% for 2012 to 2014.
Demand in the property sector
Affected by political issues and
cooled in 2015 along with the slow Foreign labour in construction
battered by financial market volatility
economic growth. Consumer income makes up 19% of the total number of
and energy prices slowdown, the
as well as consumer confidence foreign workers in the country, based
ringgit performed below par in 2015
weakened amid the high interest on statistics done by the Human
as it depreciated to a multi-year low
rate environment and weakened Resource Ministry. The recent abrupt
of 4.477 ringgit against the US dollar
Indonesian currency. Persistent suspension of the foreign labour
in September that year.
uncertainties surrounding tax policy to hire an additional 1.5 million
regulations governing property in the Short to medium-term prospects foreign workers into the country
beginning of 2015 also added to the for the construction sector remain remains an issue for labour-intensive
weak sentiment. However with rapid sustainable, with increasing state sectors until the government is
urbanisation, younger demographics and private sector spending as the able to ascertain its actual foreign
and the rising middle class in Jakarta, government releases more initiatives manpower needs as well as review
the demand for affordable residential to spur industry growth. The the two-tier levy programme for
property is expected to see steady government is expected to spend foreign workers.
growth. another RM1.4 billion to build and
Barring any unforeseen market
upgrade rural roads linking to Kuala
The construction of several new conditions, building tender prices
Lumpur. Besides an extensive long
retail developments is expected to in Kuala Lumpur are anticipated to
term development plan that includes
be completed in 2016. They include moderate to between +1.0% and -1.0%
a high-speed rail link to Singapore,
Pantai Indah Kapuk Mall in North in 2016.
some of the multi-year mega projects
Jakarta, Shopping Mall@Pancoran
include the RM11 billion plans to
in South Jakarta, Neo SOHO Mall
build the town centre for wired-up
(Podomoro City) in West Jakarta and
Cyberjaya city south of Kuala Lumpur
Bassura City Mall in East Jakarta.
and a RM7 billion airport township,
Barring any unforeseen market dubbed the Aeropolis, around Kuala
conditions, building tender prices in Lumpur International Airport (KLIA).
Jakarta are anticipated to increase by
The construction of the 52.2km long
about 1.0% to 4.0% in 2016.
KL MRT line 2, also known as the
Sungai Buloh-Serdang-Putrajaya
(SSP) line, is due to begin in June
2016. Comprising of 36 stations, it
is targeted to start operation in the
last quarter of 2022. Construction-
related industries should also see
some positive spill-over effect from
the infrastructure projects. Demand
for affordable housing is expected to
continue to support the construction
industry.
29
Oasia Hotel, Singapore
Client: Far East Organisation

Architect: WOHA Architects
30
ASIA
Macau Shanghai
According to the Macau governments Shanghais industrial transformation Projects under construction include
Statistics and Census Service, GDP for accelerated steadily in 2015 as did Hongqiao Transportation Centre with
Q4 2015 decreased by 14.4% y o y Shanghais overall economic growth. exhibition, office and commercial
in real terms. The unemployment rate Shanghai's GDP amounted to over areas; Disneyland development,
for November 2015 to January 2016 RMB 2,496 billion in 2015, a y o y which is targeted to open in June
stood at 1.9%, same as that in October growth of 6.9%. this year; QianTan development
to December 2015. centre with retail, hotel, office and
Real estate investment in Shanghai
school; XuHui Central Urban Complex
With the rapid contraction of the amounted to nearly RMB 347 billion, a
development with retail, office,
gaming and tourism industry, Macaus y o y growth of 8.2% and represented
hotel and service apartment; XuHui
economy has been in decline and the 54.6% of total investment in fixed
BinJiang Centre Urban Complex
construction output in the coming assets in Shanghai. Total investment
development with retail, office, art
months is expected to fall rapidly. in residential projects was over RMB
and culture, recreation and high-end
The government is planning to invest 181 billion, a y o y growth of 5.1%
residential.
in a number of infrastructure and while total investment of offices and
social projects including building commercial projects was over RMB Tender prices have seen a downturn
28,000 public housing units within 65 and RMB 46 billion, a y o y growth since Q3 2014, and declined further
the new reclamation Zone A. The of 22.4% and 2.1% respectively. The by 4.5% in 2015. The prices of major
Light Rail Transit project as well as increase in the growth of investment building materials such as steel,
works associated with the Hong in offices was significantly higher than cement, concrete and sand have
Kong-Zhuhai-Macao Bridge is well residential and commercial sectors. been falling in the past two years. It is
underway. These works will provide expected that the downward trend of
In 2015, 100 key projects were
support to the construction industry tender prices will continue in the first
completed in Shanghai with a total
in the next few years. Overall, it is half of 2016.
investment of RMB 45.8 billion yuan.
expected that tender prices in Macau
They are all important contributors to
will increase moderately in 2016 by
the local economy.
2.02%.
In 2016, Shanghai government
will launch 19 large projects,
each involving over RMB 1 billion
covering civil aviation, advanced
equipment, information technology,
oceanographic engineering, and
automotive industries.
Meanwhile, the Shanghai Economic
and Information Technology
Commission will draft a three-year
plan to launch large-scale projects
and to attract investment. The city
will promote new energy vehicles,
replace old taxis and buses, speed
up Metro construction, and introduce
bidding procedures for public
hospitals.
31
ASIA
Shenzhen
Shenzhen's GDP growth for 2015 was With construction of existing projects
8.9%. The total amount of GDP as at in full steam and new projects
the end of 2015 was RMB1, 750 billion being rolled out continuously
that will soon surpass that of nearby in the near future, construction
Hong Kong. Consumer Price Index activities in Shenzhen are expected
in 2015 rose moderately by 2.2%. to maintain at the same level in the
With an increase in population from next few years. Due to oversupply
18 million to 21 million people and in industrial production along with
the easing of liquidity by the Central the severe drop in oil prices and raw
Government, the average new home materials, material costs went down
price in Shenzhen increased by 39% in significantly in 2015 especially the
2015 to RMB 42,591/m2 that was the cost of steel bar reinforcement. This
highest among all cities in mainland was somewhat offset by the increase
China. in labour costs. There have been
signs since the end of 2015 indicating
One of the tallest buildings in
material prices have bottomed out.
mainland China, the Ping An Finance
The overall effect is likely to be a
Centre which is more than 600m tall
moderate fluctuation in construction
will be completed and opened later
costs in 2016.
this year. The ancillary tower next
to it, which comprises a Park Hyatt
hotel and serviced apartments, is
anticipated to be completed by the
end of 2017. Shenzhen has enjoyed
the new economic glow, with the
city nick named "China's Sillicon
Valley", and is home to headquarters
for about 10% of new IT setups as
well as Tencents, Dajiang Innovation
Technology and Huawei. Many mixed
use developments including new
developments in Qianhai and the
redevelopment of older existing areas
are underway. Qianhai is a free trade
zone in Shenzhen, intended as a test
bed for China's yuan liberalization
and other financial reforms, and has
attracted many foreign banks and
leading financial institutions in the
past two years.
32
ASIA
Singapore
Singapore's economy slackened in Integrated Logistics Hub, PUB's
the later three quarters of 2015 after water reclamation and sewerage
performing well in the Q1 2016. The projects, Changi Airport's 3-runway
economy grew 1.8% y o y in 4Q 2015, system, improvement works to the
unchanged from the preceding Kranji Expressway and Pan-Island
quarter. For the whole of 2015, Expressway, and the remaining
Singapore's GDP showed the contracts for the Thomson-East
weakest rate of growth since 2009 Coast MRT line. For 2017 and 2018,
as it expanded by a modest 2.0%. average construction demand is
Amid the volatile global financial expected to be sustained at between
market and plunging oil prices, S$26 billion and S$35 billion, and
growth outlook is expected to stay S$26 billion to S$37 billion in 2019
muted in 2016 beyond 1H 2016. The and 2020.
Ministry of Trade and Industry (MTI)
Construction costs will continue
maintains 2016s GDP growth rate
to face pressure from the impact
at 1.0% to 3.0% as it expects global
of regulatory charges and higher
growth in 2016 to be supported by
labour costs in the tight labour
strengthening growth in advanced
market. Labour costs are expected
economies, despite challenging
to rise as construction firms are
conditions in the emerging markets.
pressured to step up on technology
Total construction demand adoption and workforce upgrading.
moderated to a preliminary estimate The foreign worker levy (FWL)
of S$27.2 billion in 2015. The will resume on 1 July 2016 after a
construction sector expanded by 2.2% temporary deferment in 2015. BCAs
y o y in 4Q 2015, as compared to the Tender Price Index (TPI) for 4Q 2015
1.1% growth in the previous quarter. declined by 1.0% from the preceding
Overall growth in the construction quarter. Looking ahead, BCA expects
sector moderated to 2.0% in 2015, tender prices to become even more
down from 3.0% in 2014 as the competitive as the shrinking market
total volume of private industrial will see competition intensify among
and residential building activities contractors. Based on current market
retracted. trends and barring any unforeseen
changes in market conditions,
Construction demand for commercial
building tender prices in Singapore is
developments in 2016 is projected
expected to grow between -3.0% and
to remain soft as weak global
-2.0% in 2016.
economic conditions persist. BCA
estimates total construction demand
to be between S$27.0 billion and
S$34.0 billion for 2016, of which 65%
of the construction contracts are
expected to come from the public
sector. Private sector projects will
include the upgrading works from
the Home Improvement Programme
(HIP) for HDB flats, the new National
Cancer Centre, State Courts' new
building at Havelock Square, JTC's
33
The Stage, London, United Kingdom
Client: Galliard Homes and Cain Hoy Joint Venture

Architect: Perkins + Will
34
EUROPE
Europes growth for 2015 was slower than anticipated with
a continued drop in commodity prices while some individual 2016 escalation
countries had robust growth. Europe is forecast to remain
stable with a slight decline from 2.1% in 2015 to 2.0% in 2016.
Central and South Eastern Europe have experienced stable
growth while Russia and the Commonwealth of Independent
States (CIS) have reclined. The United Kingdom saw moderate
growth slowing from previous years. Germany, France & Italy
had slower than forecast growth.
GDP growth for the UK is forecast to be 1.9% down from 2.2%
in 2015. The potential economic consequences of the Brexit
referendum are still being debated however.
Within the UK there is evidence of a slowing of growth in
private residential and commercial schemes as investors and
developers take stock of the referendum decision to leave the
European Union. A clearer picture has now emerged of the
Regional Relativities
Brexit plan, timetable and impact and this, together with the
Cities Q32016
Governments commitment to infrastructure and affordable
Oslo 226
housing should have a stabilising effect over the next six
Berlin 179
months. Dublin 171
London 166
The value of construction work done for all trades in 2015
Paris 166
was an 11% increase on the previous years values. The Brussels 162
largest increases for project type were bridges and tunnels, Rome 161
water projects and then utility projects for electricity and Bristol 138
telecommunications. Amsterdam 137

Manchester 133
Ireland remains the highest GDP growth in Europe at 7.8% for Birmingham 129
2015 and this is forecast to retract to 4.9% in 2016. France Madrid 127
is forecast for 1.1% in 2016 and Germany at 1.5%. Greece Moscow 107
Warsaw 102
continues its recovery and is forecast at -0.6% for 2016.
Prague 99
Central Eastern Europe has had robust growth with Poland, Budapest 95
Slovak Republic and the Czech Republic reporting the

strongest growth of 3.6% for both Poland and the Slovak Regional market activity
republic and 4.2% for the Czech Republic. The 2016 forecast Sectors per Zone
for most is to remain steady with the exception of the Czech
Republic to decline to 2.5%, Hungary to decline to 2.3% and 15
Slovenia to decline 1% to 1.9%.
Russia and CIS are set to remain subdued due in part to the
slowdown in China and the sanctions on Russia but also the
continuation of pressure on commodities. GDP for the CIS 29
was -2.8% for 2015 and is forecast to improve slightly in 2016 33
to -1.1%. Russia is set to increase from -3.7% in 2015 to -1.8%
in 2016.
Peak MID trough

Zone Zone Zone
35
EUROPE
Amsterdam Birmingham Brussels

Construction in the Netherlands is Through the first half of 2016 the The overall outlook for Belgiums
experiencing good growth following construction market in Birmingham construction sector is somewhat
a deep recession; 2014 was still remained buoyant with increasing subdued with the Federal Planning
seeing construction volumes around commercial activity including Bureau predicting slow growth.
20% down on 2008 figures. This significant speculative office projects In contrast with the majority of
growth is encapsulated in the 4.3% as well as the continuation of European countries, the construction
growth that was witnessed in 2015. speculative industrial development sectors growth is underperforming
A large portion of this growth came activity. Input costs continued to compared to the rest of the
from residential projects, with an drive inflation as well as capacity economy, with just a 1% increase
estimated 20-30% increase in prices in pressures in key specialist trades. expected in 2016. Belgium is also
Amsterdam. Inevitably the construction sector seemingly bucking the trend with
in the Midlands is diverse and there regards to residential sector growth
The commercial and infrastructure
was a slowdown in activity in some with construction companies
sectors are also experiencing growth,
sectors, sizes and types of project in currently expecting a decline in the
but not at the same speed with the
the run up the summer referendum. completion of new buildings this
government remaining cautious
Following the UKs Brexit vote, the year due to the number of residential
in market conditions that remain
industry has paused for breath trying permits being in decline y o y.
challenging. As a result of this, those
to foresee the impact on pipeline and
operating in these sectors are facing In the non-residential construction
projects coming forward, and thus
strong competition resulting in tight sector, a y o y decrease in the
the impact on construction costs.
margins. number of permits was recorded
The complex picture of currency
in 2015. Government investment
Berlin fluctuation, uncertainty in mid-
remains low compared to the
The Germany economy in general term pipeline and existing capacity
European average. Infrastructure
continues to remain strong. We are constraints is likely to take a while to
building is still facing decreasing
seeing ongoing investment in all settle into any clear pattern. Short
order books and prices.
sectors, from local and international term stagnation and modest decline
developers and investors alike. This in all-in tender price inflation is
has led to the construction industry expected into 2017. Notwithstanding,
increasing its growth from the 1% the region generally appears to have
gained in 2015 to a predicted 2.1% in a cautiously optimistic outlook. The
2016. positive impact resulting from the
halo effect of high profile relocation
The retail, commercial, hotel, deals from London is expected to
logistics and residential sectors are support commercial and residential
performing well. Current demand for development in the City. Public
investment projects/properties for sector projects are still coming
international investors cannot be met. forward and the regions exporting
This heightened level of activity is manufacturing industry hoping to
leading to a shortage of construction benefit from a weak pound.
capacity and increases in tender and
construction prices.
In particular the residential sector is
seeing an increase; the number of
residential building permits granted in
Germany jumped by nearly a third to
over 84,000 in the first three months
of 2016. A large proportion of these
can be directly linked to adjusted
immigration policy.
36
EUROPE
Budapest Dublin London

In the period leading up 2016, Ireland is predicted to be the fastest- The full effect of Brexit is yet to
incoming European funds has meant growing economy in Europe in 2016 be fully established albeit there
very strong growth and optimistic according to recent figures from has been an immediate reaction
market forecasts. As European Find the European Commission, with the by the institutions to stall any new
investment reduces, growth is still EUs executive arm expecting the transactions. There has been a
predicted up until 2020, however, economy to grow by 4.9 per cent this reduction in the number of central
this is beginning to slow with a year. London office leasing transactions
significant decrease in construction as a result of market uncertainty.
Irelands construction sector is
output at the beginning of the year. Whilst these appear to be unsettling
expected to grow by more than 20
This is expected to reduce price statements the amount of vacant
per cent in 2016 this is less than
inflation pressures in property and office space in Central London
half of the unsustainably high peak
construction. remains far lower, almost half, than
recorded in 2007. The industry is now
that prior to the last economic
There are signs that international estimated to be worth 15 billion in
downturn in 2009. This should help
developers and investors are 2016, with costs rising by 7 per cent
to preserve a subdued but sustained
returning to Hungary after a few throughout the year.
demand for good quality office
very weak years, but growth is still
Both public and private projects are space.
heavily dependent upon the larger
continuing to experience the levels of
infrastructure projects at present. The new Mayor of London made
growth achieved in 2015 however the
the provision of Housing a key
residential sector has been slower to
feature of his election campaign. The
recover.
requirement for affordable Housing
Commercial developments and fit- at the rate of supply that the mayor
outs are strong, particularly in Dublin, has suggested will pressure the
and many previously abandoned existing construction supply chains.
projects are back under way.
There is an indication that the amount
The residential sector however of overseas investment into the
appears to have been directly London residential sector is slowing
affected by increased construction particularly at the highest, prime,
inflation levels and a lack of skilled levels. There is the possibility that the
resources resulting in a major low level of the pound in comparison
housing crisis evident throughout with other currencies may sustain
the country. Construction inflation overseas investor interest in central
levels are ahead of general inflation London.
with average construction build costs
continuing to increase. The Society of
Chartered Surveyors Ireland recently
compiled a study highlighting the
difficulty to develop residential units
within the parameters set by the
loan to income/loan to value ratios
(Central Bank residential mortgage
lending) combined with the actual
cost to build a house in Dublin.
While the construction sector
as a whole is experiencing a
healthy recovery in 2016 there are
considerable factors that need to be
addressed the skills shortage and
construction costs being key issues
to be rectified to aid sustainable
growth within the Construction
Sector.
37
One Queen Caroline Street, Hammersmith, London, United Kingdom
Client: Landid
Architect: Penson
38
EUROPE
Madrid Milan Oslo

The construction sector in Spain grew International investment has The downturn in the Norwegian oil
by 2.5% in 2015. In 2016 the upturn moved back into Italy, coming industry continues, with demand
is estimated to be a more palpable predominantly from America, Asia from the petroleum industry
4.4%. The upcoming elections in Spain and the Middle East, with interest reducing since 2013. This trend was
are key. If the post-election civil concentrated on Milan and Rome, compounded by the sharp drop in
engineering sector remains a focus along with main tourist destinations. oil prices during the autumn of 2014.
for future government, the medium European investors are also looking in The current economic downturn
term is likely that the construction secondary markets. began at the same time oil prices
is able to maintain rates of growth plunged. In 2015, mainland Norways
ISTAT recently indicated that inflation
higher than that of the economy GDP rose by just 1.0 per cent, and
will remain negative into autumn
(4% in 2017 and 3.3% in 2018). we expect even slightly lower growth
and the overall construction industry
this year. Unemployment rose
Whilst these forecasts could be growth is essentially nil for 2016 with
sharply from spring 2014 to autumn
described as very substantial perhaps modest growth predicted for
2015, but the increase has since
progress, in a sector very badly 2017.
levelled off. Slightly higher economic
hit by the 2008 financial crisis, it is
Moscow growth going forward will mean that
anticipated that it will take up to
The economic climate in Russia unemployment is likely to peak during
10 years to recover to construction
remains depressed and is likely to the year, with an annual average of
output in line with that financial crisis.
remain so for at least as long as the 4.7 per cent of the labour force.
Manchester economic sanctions remain in place. From early 2017, mainland Norways
Manchesters economic growth However since the beginning of 2016 GDP will surpass trend growth, which
prospects are still strong. there has been a general increase in is estimated at about 2 per cent.
Manchester, famous for its industrial interest in construction and property Employment is also predicted to pick
heritage and Manchester United investment in the region. up, and unemployment is forecast to
Football Club, has become the gradually fall to 4.3 per cent by 2019.
Whilst modest interest remains from
UKs fastest growing Powerhouse
foreign investment, most activity is
city with 56 billion gross value Paris
driven through local client and this
added (GVA). Its property market Economic growth is slow in France,
is expected to continue. We are
goes from strength to strength with a 3% reduction in construction
experiencing limited activity across
with planning permission recently activity in 2015 resulting in sluggish
the public and private sectors,
granted for six central skyscraper 1.1% of growth. This comes as a
however, of particular note is
blocks of apartments. Due to the consequence of low household
growth being experienced within the
UKs and regional housing shortage, purchasing power, persisting high
industrial sector.
investors are attracted to these unemployment and public budget
residential developments and are constraints.
keeping the residential property
With this drop in output, French
sector in the region very strong.
construction companies are seeing
Manchester is attracting substantial
revenues and investments remaining
international investment on schemes
low and prices and profitability both
such as Airport City, Manchester
being squeezed. The public sector
Life (residential projects) Media
is focussing heavily on commercial
City, NOMA (residential/mixed
strategy and currently leaning
use developments), Spinningfields
increasingly on cost reduction
(commercial developments) and
and cost management for public
University expansion. It is at the
operator.
centre of the 50 Billion Northern
Powerhouse, which is a collection of
Northern UK cities working together
designed to encourage investment
and rebalance the economy of the
country to reduce its reliance on
London.
39
Lusail City, Lusail, Qatar
Developer: Lusail Real Estate Development Company (LREDC)
40
MIDDLE EAST
The UAE has recorded strong growth for 2015 at 3.9%
however this is forecast to recline to 2.4% in 2016. The 2016 escalation
continuation of lower oil prices has seen a reduction in growth
forecasts for most oil producing countries. The oil price shock
is unprecedented and recently many countries have adopted
deficit reducing measures. The medium term fiscal positions
are likely to remain challenging. These challenges will see a
reduction in spending and confidence with the on flow effect
of rising unemployment and slow wage growth to further
fiscal pressure. Policy measures are seen as the answer to
minimising the impact of the challenges.
Rapidly expanding airport hubs in Dubai, Abu Dhabi and Doha
are not only grabbing market share from Heathrow but also
other longer-established rivals in Europe as more international
Cities Q32016
air traffic is routed through the Arabian Gulf. Doha 118
The UAE continues to negotiate a free trade agreement with Abu Dhabi 113
Dubai 110
China which will boost the economic stability in the region.
Riyadh 110

Sectors per Zone
17
Peak MID trough

Zone Zone Zone
41
BLVD Crescent, Dubai, United Arab Emirates
Client: Emaar Properties PJSC

Architect: Brewer Smith Brewer Guld (BSBG)
42
MIDDLE EAST
Abu Dhabi Dubai Riyadh

GDP growth for 2015 in Abu Dhabi Dubai experienced GDP growth in Saudi Arabias GDP growth in 2015
was 7.7%. Abu Dhabi is continuing 2015 of 4%, according to Department was 3.35% and the General Authority
to diversify the contributions made of Economic Development. The for Statistics has forecast 1.2% for
by each sector to GDP. While GDP strengthening USD has put pressure 2016. Construction GDP growth
growth remains positive, the need to on growth due to its effect on for 2015 was 5.6% and is forecast
shift from hydrocarbon reliance is a tourism, spending, construction and to retract during 2016. Sentiment
focus for the Abu Dhabi economy. real estate. remains slightly cautious due to the
Non-oil activities lifted from 49% of effect of lower commodity prices.
GDP in 2014 to 65% in 2015 reflecting Dubai is hoping to expand the
the intentions of Abu Dhabis tourism sector as government Construction contributes
economic agenda. spending in recent years on approximately 8% of Saudi Arabias
infrastructure has seen large projects GDP. Saudi Arabia has allocated
According to the Statistics Centre,
now coming to fruition, including the US$43.8 billion for transport,
construction GDP has increased 4.53%
new airport. The aviation industry telecommunications, water,
through 2015 due to continuation
is expected to contribute 32% to agriculture and other related
of infrastructure projects. The 2015
increase is slightly down from 2014 Dubais GDP by 2020, according to infrastructure. Additionally, it has
increase to GDP, which was 4.90% and government estimates. several railway projects in the
is viewed as the cautious response to pipeline. More than 80 megaprojects,
Real estate and construction account
lower oil prices. each worth at least US$1 billion, are
for about 21% of GDP, according
underway or planned for completion
Construction contributed 12% of the to Dubai Department of Economic
by 2030 in Saudi Arabia making it the
total GDP for Abu Dhabi in 2015 and Development. With the pressure on
Middle Easts largest construction and
was down slightly from 12.2% in 2014 oil prices, there has been a slowdown
build market by a huge margin.
but is considered stable in the current in awarded projects. As existing
climate. projects continue, there is a degree The past five years has seen some
of caution in the market about the volatility in material prices. 2015
The two non-oil producing sectors
launching of new projects. saw decreases in pricing for various
that have seen the largest increase
in GDP are manufacturing and the building material including cabling,
Growth in the emirate was buoyed by
financial and insurance sector. cement, steel and ready-mixed
the continuation of mega-projects,
Diversifying economic contributions concrete. Cabling and steel had the
including the US$545 million phased
from non hydrocarbon sectors is a largest decreases over 2015 with
Dubai Water Canal Project. . Once
key goal of current macroeconomic -11% and -16% respectively. Over the
the project is concluded, likely in late
policy and this is starting to show in past five years, cabling has fallen by
2016, it will connect the Business Bay
figures. Manufacturing increased by more than -18% and steel has fallen
development with the Gulf.
11.23% during 2015 and has increased more than -22%. Timber saw a small
by 26% since 2011. The financial and It is expected that the year 2016 will increase in 2015 rising by 0.65% in
insurance sector increased 9.26% for remain a highly competitive market 2015 included in the 9.71% increase
2015 but has increased a significant with tender return prices expected since 2011. Concrete prices fell by
111% since 2011. to be lower than they were from 1.38% during 2015 but have now
Q3 2015 while tender prices are increased 6.48% above 2011 prices.
Within the construction sector, a
joint venture between Australian forecasted to increase 3.0% in 2016.
company Total Alliance Health Concrete is relatively stable although
Partners International and UAE based steel prices are most notably are
KEF Holdings has been established off their highs from last year by
to form KEF-TAHPI Design Studio. some 15%. Both reinforcing steel
This new venture has formed to and structural steel have witnessed
provide a design and manufacturing notable pullbacks in prices.
facility for producing prefabricated
components of healthcare facilities
including concrete structure, whole
room pods, wall packs, staircases etc.
A new US$100 million (Dh360 million)
facility at Jebel Ali is scheduled
for commissioning in 2016 to
manufacture prefabricated healthcare
modules.
43
Te Oro, Glen Innes, New Zealand
Client: Auckland Council

Architect: Archimedia
44
OCEANIA
The Oceania region remains resilient to some of the global fiscal
pressure affecting growth in other parts of the world. Australia and New 2016 escalation
Zealand have both through 2015 felt the pressures of large industry
sectors suffering downturns while other industry sectors have offset
these downturns and reported growth. The GDP growth for Australia in
2015 was 2.5% and is forecast to remain stable at 2.5% through 2016 as
reported by the IMF. New Zealand was reported to have 3.4% growth to
GDP in 2015 and is forecast to weaken to 2.0% during 2016.
Australia is still stabilising since the end of the mining boom and of
course the continuing fall in commodity prices is creating more pressure
on the western and northern states. For the eastern states which were
less reliant on mining for their contribution to GDP, growth has not been
offset by the reduction in mining and whilst modest, growth has been
more stable. Mining currently contributes 7% to Australias GDP.
House prices are continuing to rise across Australia with the Sydney and
Melbourne leading the way as demand from population growth creates
increased need for new and existing dwellings with 2015 reporting a
1.3% increase to the population.
Infrastructure is high on the agenda as it is a federal election year and
the states look to cement deals to boost their own economies while
federal politicians look to gain votes. Unemployment is currently at 5.7%
The construction industry has seen increases in all eastern states while
Cities Q32016
the mining states have had little to invest as those states retract.
Sydney 127
Residential construction is leading the way when compared to other Darwin 126
industry sectors with the significant growth in Sydney, Melbourne Canberra 118
and Brisbane. As residential appears to have peaked some of the Christchurch 118
infrastructure projects that have been proposed will give continuity to Perth 118
construction if other sector remain subdued. Melbourne 115
Adelaide 111
New Zealand has had increases in construction and tourism, however
Wellington 110
they also had the pressures of lower commodity prices with less
Townsville 109
demand and drought affecting the agricultural sector. The dairy
Auckland 105
industry in particular has been declining for some time and is forecast Brisbane 105
to continue in a subdued state. The New Zealand dollar has been
forecast to fall slightly through 2016 which will support exports, primary
industries and tourism.
With low inflation, falling fuel prices and modest wage growth of 2.0% as Sectors per Zone
well as lower interest rates all equates to more expendable income for
households and support for further growth.
The construction industry has seen significant growth, particularly in 29
Auckland. Despite the Canterbury rebuild nearing its zenith, housing
across New Zealand is still growing and adding to the growth of the
construction industry as a whole. There are a number of infrastructure
projects spurring the industry on and with this and household spending
business confidence is higher adding further commercial interest in
24 30
the construction industry. The increase of record high net immigration
of 1.5% is adding further demand to housing needs giving a boost to
construction and house price growth despite marginally lowering the
GDP per capita.
One of the outcomes of the current climate is the pressures that are Peak MID trough
arising appear to be offset by the positives fairly quickly with the Zone Zone Zone
forecast stable in the worst case and the potential growth above the
initial forecast of 2.0% for 2016.
45
South Australian Health and Medical Research Institute (SAHMRI), Adelaide, Australia
Client: SA Health Major Projects Office

Architect: Woods Bagot
46
OCEANIA
Adelaide Auckland
Diversifying the economy for South Australia has well established Despite a weak dairy sector the New
South Australia seems to be the industries for tourism, education, Zealand economy has a positive
key challenge to future proofing health, arts and sport however these outlook with a strong Tourism sector
the states economy. With falling industries are considered smaller which has overtaken dairy as our top
construction numbers, reductions contributors to GDP and therefore export earner. Population growth,
in manufacturing, increases to need to be expanded as alternatives construction and tourism will be the
unemployment and lower consumer to increase growth for the state. key supports to economic growth in
sentiment the state needs to rely on Two major education projects at the next few years. Auckland is the
largest recipient of tourism income
alternatives in the short to medium the University of South Australia
and with strong population growth
term to create some level of stimulus. and the University of Adelaide
is feeding a buoyant construction
both recognise the commitment to
The South Australian economic market. Low inflation has seen the
growing alternative industries to
outlook has not been good for Reserve Bank cut the official cash rate
manufacturing.
some time however the recent to 2.5% and commentators predict it
announcement that 12 new Construction work done has seen will remain at a similar level through
submarines will be built in Adelaide decreases in residential, non- 2017.
is a welcome boost for the economy. residential and engineering for Net migration and population growth
With the recent announcements 2015 compounding the economic is generating strong demand for
declaring Arrium has been placed pressures. Whilst these reductions high density residential projects
into voluntary administration and the have in part kept a competitive and associated infrastructure and
potential closure of Whyalla ore mine tender market at all levels of is a major contributor to Auckland
and steel works is not good prospect tendering, the addition of 2015 construction activity. An ageing
for Whyalla or the state. numbers have equated to a 10% population is also supporting a lift
decrease to construction work done in retirement village developments.
South Australia is due to face further
since 2010. There are also a number of significant
pressures when car manufacturing
other non-residential developments
is set to cease all works in some 18 Tender prices are predicted to
set to start construction this year.
months time and the power plant at increase by 2.0% over 2016. These include the International
Port Augusta is scheduled for closure Convention Centre, The Precinct
and demolition. The submarines Downtown Development, the Inner
contract is hoped to offset some of City Rail Loop, Paremoremo Prison,
these pressures with the creation and the new Park Hyatt Hotel.
of approximately 1700 jobs and the
Demand is driving a volatile Auckland
continuation of 1100 jobs that may
construction market with strained
have otherwise been lost.
labour and supply chains. Material
prices are generally steady however
labour shortages are driving increased
costs and margins are reflecting the
volume of work. Several contractors
are currently in the position of being
selective on the contracts they
want to win. It is becoming more
important that tender documents are
fully complete and that programmes
allow sufficient time for tendering
and construction in order to make
projects attractive to price.
Concrete work, reinforcing steel and
some services trades in particular are
experiencing high demand resulting
in higher prices. Construction cost
escalation must be considered as
a key element of project feasibility
models. Tender prices are forecast to
increase 6.66% during 2016.
47
Brisbane Convention & Exhibition Centre, Brisbane, Australia
Client: South Bank Corporation / RCP

Architect: Cox Rayner
48
OCEANIA
Brisbane Canberra
The residential construction industry Guarded optimism is the take out
in Queensland remains in positive from the Deloitte Access economics
growth territory with an increase of report on the ACTs Economy. As
27% in residential construction work confidence grows there are still
done for 2015. Both non-residential concerns of the economys reliance
and engineering decreased at on the Federal Government. The
19% and 32% respectively. Overall, uncertainty over tax reforms relating
the total construction work done to property remains high. 2015
for 2015 fell 19%. The decrease is saw a 31% rise in the total value of
driven by engineering which is to building from 2014 in the ACT, an
be expected as commodity prices encouraging start to 2016.
remain low and the mining industry
deals with closures during restrained The Universities in Canberra are
financial times and falls in related leading the charge with two 500 bed
infrastructure including in Electricity student accommodation projects
and pipelines, Bridges, railways and starting construction and another
harbours. 800 bed project in planning stage
due to start construction at the end
There are forecasts coming to market
that increases in the hotel, aged of the year. The 140 bed University
care and education are likely as of Canberra Hospital contract
the industry looks past the current has been awarded to Brookfield
residential pipeline. The Building Multiplex and has commenced on
approval numbers however, to site. Other planned works include
December 2015 showed no increase an Aged Care Facility and other
in these sectors. Forecasting campus masterplan developments.
increases we would see increases Another major announcement for
in retail and wholesale based on 2016 was the awarding of the Capital
approvals to the end of 2015. Metro Light Rail Project to Canberra
Metro a consortium including Pacific
With the dollar having moved lower
Partnerships, CPB Contractors, John
industries such as construction,
Holland, Mitsubishi Corporation,
tourism, education and agriculture
Aberdeen Infrastructure Investments,
will looked upon to move beyond
Deutsche Bahn International and CAF
the mining boom. Certainly the
lower dollar will make international for AU$698 million.
visitors consider Australia as their With confidence recovering and
next destination. Additionally, the a number of major projects in the
recently revised Australia-China Air market our forecast is a rise in the
Services agreement will increase the tender price index for 2015 of 2.25%.
total allowable capacity of Chinese
passengers to Australian gateway
cities by approximately 50% by
October 2016.
Lower interest rates should help
improve consumer sentiment. This
will help offset While wage growth
is expected to remain weak in the
near future, it is one of the main
drivers of the forecast of a steady
unemployment rate of 6%, as it has
made workers a more competitive
option for employers,
The Tender Price Index is forecast to
increase during 2016 at 7.86%.
49
254 Montreal Street, Christchurch, New Zealand
Client: Canterbury Property Investments

Architect: Warren and Mahoney
50
OCEANIA
Christchurch
Canterbury construction levels have Two major projects that are keenly
been at record highs for several years awaited are the Metro Sports
now and while there is undeniably a development and the planned
great deal more work to be carried Christchurch Convention Centre.
out over a number of years, the peak Recently Metro Sports issued an RFP
in terms of value of construction work for potential contractors. In addition
at any one time appears to be near. there are a number of smaller
Recently the first tranche of public commercial projects underway
service employees moved into their throughout the CBD and wider city.
new CBD premises to join a number
Supply and demand continue as the
of newly completed commercial
key market factors in Canterbury
offices. This gradual repopulation
with the rescheduling and deferral
of the CBD will now continue with
of a number of projects and the
a number of developments due for
likely rebuild period continuing for
completion in the next 18 months.
longer than originally expected. Peak
Less residential work is planned
in demand has arrived at a slightly
now that the peak of the residential
lower level than anticipated. This
rebuild has passed. The tangible
has had a knock on effect in slightly
result of this levelling off was a drop
reducing expected construction
from 500 residential consents in
cost escalation levels over the next
December 2015 to 350 in the January
period. In addition to a flattening in
2016 period.
the demand, the supply chain has
The Christchurch Hospitals rebuild responded in many areas. There
continues to gain momentum with are still specialist areas which are
Burwood due for completion in the susceptible to extraordinary demand
2nd Quarter of the year while the driven escalation on a project by
Christchurch Hospital Acute Services project basis. A further area that has
Building has completed foundations led to construction cost escalation
and the substantial steel frame will is that of the New Zealand dollar
soon begin to rise on the skyline. The exchange rate volatility. The last 12
University of Canterbury continues months has seen a 10c drop against
to progress as a major building the US dollar. Given the high quantity
programme and Lincoln University of imported goods into New Zealand,
is in design stages for major rebuild this remains a key escalation risk on
projects. projects going forward.
The Justice Precinct project is Tender prices continue to show
taking shape in the CBD and the prosperous construction conditions
Christchurch Town Hall repair in Christchurch as the indexed prices
and refurbishment project is well increases by 6.0% over 2015 and are
underway with the foundation repairs. projected to increase an additional
Christchurch Council and Lyttelton 4.0% over 2016.
Port are two more institutions with
major ongoing building projects at
various stages. Christchurch Council
recently successfully concluded
their insurance negotiations with
an agreed settlement which now
gives certainty in going forward with
regard to funding availability.
51
OCEANIA
Darwin
Developing the North remains a key We are however buoyed by Defence
focus for the NT economy noting which is looming large as a major
a State election due this year. A investor in the industry. We forecast
number of projects have been low levels of tender price index
tendered and awarded recently with increases in the foreseeable future
the Government looking to release with a number of contractors vying
a few more projects. Noting that, for the few projects on offer.
with the exception of a few major
Darwin has experienced no overall
projects, the industry is struggling
movement in the crane index with
with very low amount of projects
adding and removing one crane
coming on line. The general outlook
within the residential sector.
for the industry is very conservative
with little private investment in most Tender prices are set to increase
industry sectors. by 1.0% in 2015 and forecasted to
increase 1.5% in 2016.
Key projects include an AU$35
billion LNG Gas plant, Regional
Hospital AU$160 million, shopping
centres AU$120 million, Defence
works AU$600 million. Infrastructure
projects such as roads and housing
subdivisions are continuing.
Residential housing is still strong
while multi storey medium to high
density residential is faring badly
with existing projects coming to
completion and very few projects
to follow. The retail sector is active
with a number of shopping centres
in construction, hospitality sector
has been buoyant with a couple
of projects finishing, Defence
projects are currently starting to
come through, industrial and light
commercial sector is active whereas
the office sector is dormant with the
recent completion of a major office
project in the CBD.
The construction industry is currently
in a trough phase with very little
appetite for private investment.
Notwithstanding a few projects
by the Government are providing
some stimulus to the industry. The
dominant project is the LNG project
which relies heavily on FIFO workers
thereby not generating the level of
investment that was expected which
has led to low level of optimism in the
market.
52
OCEANIA
Gold Coast
The ongoing success of the Light With the increase in construction
Rail as well as the low value of the activity, we are continuing to see an
Australian dollar and continued increase in the costs of a number of
interest by foreign investors and trades including formwork, tiling and
developers has seen uplift in offshore plasterboard partitions and ceilings.
investment on the Gold Coast in both We are also seeing the ongoing
development sites and apartments. influence of the lower Australian
The rising residential selling prices dollar on the cost of imported
have resulted in renewed interest in materials and equipment with trades
residential development sites. The such as lifts, mechanical, aluminium
fringe areas of the Gold Coast and windows and doors and white goods.
Surfers Paradise currently remain the With the impending completion of
strongest markets. some major retail developments, the
Gold Coast is currently experiencing
It is the sheer size of the new
a shortage of specialised shop fit-
developments in the pipeline that
out contractors. These items could
has taken the Gold Coast by surprise,
put added pressure on tender price
with more than six developments
increases, at least in the short term,
in excess of AU$1 billion currently
while the industry is busy.
being considered. The recent
commencement of the AU$1 billion The tender price index is set to
Jewel Project at Surfers Paradise; increase 4.0% over 2015 and increase
the Iluka redevelopment; the AU$400 an additional 6.0% over 2016.
million; and 2018 Commonwealth
Games Village at Parklands together
with the continued construction of
the AU$500 million redevelopment
of Pacific Fair Shopping Centre,
continues to drive the market.
Works are due to commence on
the Gold Coast Airport ' Project
Lift' with intended completion of
the main body of works prior to the
Commonwealth Games in 2018.
53
OCEANIA
Melbourne Perth
The outlook for Melbourne is The Metro rail network is budgeted The close link between commodity
favourable with sentiments in a to see extensions to the South pricing and the Western Australian
number of sectors receiving a Morang line, upgrades to the economy continues to affect business
boost from government funding. Hurstbridge line and the removal confidence and investment. Although
Melbournes growth has risen to 2.5% of 50 of our most dangerous committed construction project
annually in 2015, with 3% growth level crossings. The regional rail are proceeding, there is a clear
forecast for 2016-17. network is set to see upgrades reluctance in the commercial sector
and frequency improvements to to commit to new capital investment.
Population growth is driving an
lines servicing Ballarat, Bendigo, The State Government is proceeding
increase of government investment
Geelong, Gippsland, the North East, with the Forrestfield Link, a new train
in infrastructure, with Government
Shepparton and Warrnambool. line that will connect the city with
infrastructure investment estimated
Perth Airport and a new terminus at
to increase from AU$4.6 billion Residential construction is continuing
the eastern suburb of Forrestfield.
in 2014-2015 to AU$7.5 billion in as the strongest performer within
Total project budget is approximately
2016-2017 focusing on schools, the construction industry however
AU$2 billion. The contract for design
hospitals, the rail network and roads. recently there has been an increase in
and construction has been awarded
Population growth was 1.7% over enquiries pertaining to both the retail
to a joint venture led by the Italian
2015, making Victoria the fastest and hotel sectors.
industrial group, Salini Impreglio.
growing state in the nation. The first trains are expected to
As the Melbourne construction
Despite population growth the market continues to remain positively commence running in 2020.
states unemployment rate has fallen stable escalation rates finished last Three companies have been selected
from 6.9% in 2014 to 5.7% in March year at 1.5% and are forecast to be to prepare detailed proposals for
2016, and is projected to be 5.5% by 2.0% for 2016. Tendering is described Stage 2 of NorthLink, a freeway
2018-19. The increase in population as aggressive while contractors between Reid Highway and
appears to be meeting demand as the are trying to secure work and only Ellenbrook, providing extra road
unemployment rate declines. A 2.0% facades have seen slight increases capacity to Perth's north-east. Total
employment growth is forecast for recently while other building costs project budget is approximately
2015-16. remain relatively stable. 1.12 billion and is expected to be
completed in 2019.
The latest budget includes more
than AU$7 billion to upgrade roads Despite approximately five years
including the duplication of Yan Yean without any measurable price
and Thompsons roads, the Drysdale increases, the current depressed
Bypass, streamlining Hoddle Street, work volumes have continued to
the Western Distributor, Monash keep price levels flat across most
Freeway upgrade and other road sectors. As the higher work volumes
safety initiatives. experienced in the civil sector wind
down (and are virtually eliminated in
Major projects such as Melbournes the north western parts of the State),
new Metro Tunnel and the Western we anticipate further compression of
Distributor which are fully funded pricing in this sector.
and ready to proceed after the
state government announced The tender price index is set to
increase 0.75% over 2015 and
they intend to fund these projects
increase an additional 2.0% over 2016.
without assistance from the federal
government due to current needs
within the state.
54
OCEANIA
Sydney
The Q1 2016 continued to present The reported fall in the non-
strong fundamentals for current residential sector approvals
and future activity in the Sydney indicates that a large range of
Construction market. tender price ranges will continue to
be experienced as contractors to
Reports from the Australian Bureau
maintain workload in a diminishing
of Statistics suggest strong building
market sector. However industry
activity. The increase in the value
forecasts suggest that future
of work completed increased by
opportunities will be at the levels
3% in Q1 2016. In response to
experienced in late 2014 and early
strong activity, contractors are
2015.
now reporting that some trades
on commercial and institution type The duration of 2016 will present
projects are experiencing resource new challenges. Demand for new
issues as trades are electing to dwellings is likely to continue
work on residential projects due however discussion concerning the
to increased margins, perceived availability of finance, change of
aversion to reduced risk and the likely taxation laws and reduced migration
occurrence of a continuous work flow intake may impact demand and delay
from project to project. commencement of new projects.
However, costs will continue to rise
The RLB crane index for Q1 2016
due to wages growth and margin
continued to report the majority of
expectations. Non-residential will
cranes being erected on residential
continue to offer opportunities in
projects and these projects are
commercial, aged care, health and
throughout the Sydney metropolitan
government infrastructure projects
suburbs. It is apparent the building
however these projects will be sought
approvals recorded in the late half of
after and contractors who accept an
2015 are now being seen in increased
element of risks are more likely to
number of cranes being erected for
secure new work to replace projects
new projects in the early months of
nearing completion.
2016.
Tender prices continue to show
Material prices continued to be
prosperous construction conditions
stable throughout the Q4 2015 and
in Sydney as the indexed prices are
Q1 2016 despite the strong demand
projected to increase an additional
for construction materials. However
4.8% over 2016.
price rises are expected in the Q2
2016 particularly in the concrete and
masonry trades.
Despite stable material prices tender
pricing continues to experience a
large range of prices received. The
range of tender prices received is
dependent upon contract delivery
system, risk allocation and the need
to secure new work to maintain
workforce and cash flow.
55
One Market Lane, Wellington, New Zealand
Client: Willis Bond & Co Ltd

Architect: Studio of Pacific Architecture Ltd
56
OCEANIA
Wellington
Construction in the Wellington region Cost escalation in our region is
continues to improve with a number finally starting to show its teeth,
of good size projects currently after being very flat since 2008. We
underway. Three additional tower remain at low levels compared with
cranes have been erected over the other centres around New Zealand
past couple of months and further but given the likely future activity t
large projects remain in design stage. is likely that we will see increasing
Activity across all sectors remains escalation over the next few years.
strong and very positive for the next Material selection for projects is
few years. becoming critical with some product
groups being priced out of the
Strengthening of existing buildings
market at present, namely Precast
still remains as a key construction
Concrete, Metal Windows and
component in our region, and this
Steelwork.
is also driving much needed fitout
upgrade works at the same time. The
Lower North Island regional centres
are showing signs of increased
construction activity with the positive
economic signals in the main centres
filtering through. We expect this to
continue for some time.
Wellington has a good variety
of current projects now under
construction, including some major
office refurbishments in various
stages, with the majority to finish
this year. New commercial office
buildings have started, along with
some mixed use developments and
further public space work on the
Waterfront and throughout the
city. Public and private multi-unit
apartment construction are also
underway with new developments
in the pre-sale and detailed design
phases at present. Fitout work is also
continuing which is providing good
ongoing work for the subcontractor
market in Wellington. Transmission
Gully and other major civil road works
on the Kapiti Coast are progressing
well and property demand is being
felt already in the northern reaches of
our region.
57
Independent consultants, local knowledge

and expertise, global network
The strength of Rider Levett Bucknall, the largest independent and most geographically prevalent construction
cost consultancy of its kind in the world, is that it has the foremost construction intelligence available to it. We collect
and collate current construction data and forecast trends on a global, regional, country, city and sector basis. Rider
Levett Bucknall publish key industry intelligence publications throughout each year. For more detailed sector and city/
country information than is published within the International Report please review our regional or country specific
publications.
A listing of our publications and proposed publishing date are:
Regional RELEASE Sector Specific RELEASE

Oceania Report Apr, Oct EMEA Hotels Monitor Mar, Sep
European Report Apr Latin America & Caribbean Hotels Monitor May, Oct
Americas Caribbean Nov
Riders Digests
Gulf States TBA
Hong Kong & China Report Mar, Jun, Sep, Dec Riders Digest USA Q1
Riders Digest Singapore Q1
Country Specific Riders Digests Australian States Q1
UK Index Quarterly Riders Digest UK Q1
Singapore Mar, Jun, Sep, Dec Riders Digest Philippines Q1
China Apr, Oct
USA Mar, Jun, Sep, Dec
New Zealand Apr, Jul, Oct, Dec
All publications are available from rlb.com or for a hard copy please contact your local office.
Sources of Information International Report

Information contained within this report has been compiled from numerous global sources and RLB offices. Certain
text and data contained within the report has been compiled from information published by the following organisations.
International Monetary Fund Regional Economic Outlooks imf.org

World Bank worldbank.org
Asian Development Bank adb.org
ANZ Bank research anz.com
Global Construction Perspectives and Oxford Economics globalconstruction2025.com
The Economist economist.com
Reserve Bank of Australia rba.gov.au
Royal Institution of Chartered Surveyors vics.org
Colliers International colliers.com
Further information can be found on their websites.
Disclaimer: While the information in this publication is believed to be correct at the time of publishing, no responsibility is accepted for its accuracy. Persons desiring to utilise any
information appearing in the publication should verify its applicability to their specific circumstances. Cost information in this publication is indicative and for general guidance only
and is based on rates as at July 2016.
RLB promotes a sustainable environment.

Printed by Mercedes Waratah using the Ecoclean Chemical Recycling Process on Maine Recycled. This stock consists of 60% certified recycled (PCW) and 40% certified virgin fibre
sourced from responsibly managed forests. Certified carbon neutral by The Carbon Neutral Company, Maine Recycled is manufactured process chlorine free and produced in a facility
that operates under world's best practice ISO 14001 Environment Management System.
58
OFFICES AROUND
THE WORLD
Africa Americas EUROPE Oceania

Botswana CARIBBEAN United Kingdom AUSTRALIA
Gaborone Barbados Birmingham Adelaide
Cayman Islands Bristol Brisbane
Mauritius St. Lucia Cumbria Cairns
Saint Pierre Leeds Canberra
North America London Coffs Harbour
Mozambique Austin Manchester Darwin
Maputo Boston Sheffield Gold Coast
Calgary Thames Valley Melbourne
South Africa
Chicago Warrington/Birchwood Newcastle
Cape Town
Denver Welwyn Garden City Perth
Johannesburg
Guam Sunshine Coast
Pretoria
Hilo RLB | Euro Alliance Sydney
Honolulu Austria
Asia Las Vegas Belgium
Townsville
North Asia Los Angeles Czech Republic NEW ZEALAND

Beijing Maui Finland Auckland
Chengdu New York Germany Christchurch
Chongqing Orlando Hungary Hamilton
Dalian Phoenix Ireland Palmerston North
Guangzhou Portland Italy Queenstown
Guiyang San Francisco Luxemburg Tauranga
Haikou Seattle Netherlands Wellington
Hangzhou Toronto Norway
Hong Kong Tucson Poland
Jeju Waikoloa Portugal
Macau Washington DC Russia
Nanjing Spain
Nanning Sweden
Qingdao Turkey
Seoul
Shanghai MIDDLE EAST
Shenyang
Oman
Shenzhen
Muscat
Tianjin
Wuhan Qatar
Wuxi Doha
Xiamen
Xian Saudi Arabia
Zhuhai Riyadh
South Asia United Arab Emirates

Bacolod Abu Dhabi
Bohol Dubai
Cagayan de Oro
Cebu
Davao
Ho Chi Minh City
Iloilo
Jakarta
Kuala Lumpur
Laguna
Metro Manila
Singapore
Yangon
59
RLB.com

2016 RLB Global Construction Market Intelligence Report October 20161

Caricato da

Informazioni sul documento

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

2016 RLB Global Construction Market Intelligence Report October 20161

Caricato da

Copyright:

Formati disponibili

INTERNATIONAL

Third Quarter 2016

Building Cost Ranges and International Construction Cost Relativities

Further information can be found To download our free App visit

Cover: Barangaroo, Sydney, Australia

RLB International Construction

RLB TENDER PRICE INDEX ANNUAL % CHANGE

Range of cost per m2 of gross floor area

Local Office Building Retail

MIDDLE EAST & AFRICA

Range of cost per m2 of gross floor area

MIDDLE EAST & AFRICA

RLB Construction Market Activity Cycle

AMERICAS Houses Apartments Offices Industrial Retail Hotel Civil

AFRICA Houses Apartments Offices Industrial Retail Hotel Civil

MIDDLE EAST & AFRICA

Global Growth Sectors vs Decline Sectors

HOUSES APARTMENTS OFFICES INDUSTRIAL RETAIL HOTEL CIVIL

Global No. of Cities within Zones

HOUSES APARTMENTS OFFICES INDUSTRIAL RETAIL HOTEL CIVIL

RETAIL 17% OFFICES 16%

INDUSTRIAL 7% INDUSTRIAL 14% INDUSTRIAL 18%

Client: Lend Lease

GDP 2.6 % 2.5 % 2.5 % 3.0 % 3.0 % 2.9 %

PPP Rate 1.455 1.431 1.431 1.437 1.444 1.447

Inflation 2.5 % 1.5 % 2.1 % 2.4 % 2.5 % 2.5 %

Unemployment 6.1 % 6.1 % 5.9 % 5.8 % 5.7 % 5.7 %

GDP 7.3 % 6.9 % 6.5 % 6.2 % 6.0 % 6.0 %

PPP Rate 3.567 3.527 3.506 3.485 3.458 3.441

Inflation 2.0 % 1.4 % 1.8 % 2.0 % 2.2 % 2.6 %

Unemployment 4.1 % 4.1 % 4.1 % 4.1 % 4.1 % 4.1 %

GDP 3.0 % 3.4 % 2.0 % 2.5 % 2.5 % 2.2 %

PPP Rate 1.480 1.463 1.476 1.476 1.478 1.478

Inflation 1.2 % 0.3 % 1.5 % 1.9 % 2.0 % 2.0 %

Unemployment 5.8 % 5.8 % 5.9 % 5.8 % 5.8 % 5.7 %

GDP 3.3 % 2.0 % 1.8 % 2.2 % 2.5 % 2.7 %

PPP Rate 0.848 0.853 0.854 0.847 0.840 0.832

Inflation 1.0 % -0.5 % 0.2 % 1.3 % 1.9 % 1.9 %

Unemployment 2.0 % 1.9 % 2.0 % 2.0 % 2.0 % 2.0 %

GDP 1.5 % 1.3 % 0.6 % 1.2 % 2.1 % 2.4 %

PPP Rate 5.369 5.516 5.795 6.068 6.286 6.505

Inflation 6.1 % 4.6 % 6.5 % 6.3 % 5.6 % 5.6 %

Unemployment 25.1 % 25.4 % 26.1 % 26.7 % 26.9 % 27.0 %

GDP 2.9 % 2.2 % 1.9 % 2.2 % 2.2 % 2.1 %

PPP Rate 0.700 0.696 0.698 0.701 0.701 0.700

Inflation 1.5 % 0.1 % 0.8 % 1.9 % 2.0 % 2.0 %

Unemployment 6.2 % 5.4 % 5.0 % 5.0 % 5.1 % 5.3 %

GDP 2.4 % 2.4 % 2.4 % 2.5 % 2.4 % 2.1 %

PPP Rate 1.000 1.000 1.000 1.000 1.000 1.000

Inflation 1.6 % 0.1 % 0.8 % 1.5 % 2.4 % 2.5 %

Unemployment 6.2 % 5.3 % 4.9 % 4.8 % 4.8 % 4.9 %

GDP 1.3 % -0.1 % -0.5 % 1.5 % 2.1 % 2.6 %

Inflation 4.9 % 5.5 % 5.7 % 4.3 % 4.1 % 3.9 %

GDP 0.9 % 1.6 % 1.5 % 1.6 % 1.6 % 1.6 %

PPP Rate N/A N/A N/A N/A N/A N/A

Inflation 0.4 % 0.0 % 0.4 % 1.1 % 1.3 % 1.5 %

Unemployment 11.6 % 10.9 % 10.3 % 9.9 % 9.6 % 9.2 %

GDP 2.6 % 2.3 % 2.9 % 3.3 % 3.4 % 3.6 %

Inflation 6.6 % 5.9 % 5.5 % 4.7 % 4.4 % 4.0 %

GDP 4.6 % 4.8 % 4.8 % 5.1 % 5.2 % 5.3 %

Inflation 4.6 % 3.3 % 2.8 % 3.5 % 3.5 % 3.6 %

Client: Emira Property Fund

Sub Saharan Africa

Client: Atterbury Property