London drops out of the 'most expensive cities to build in' top 10 rankings for the first time, according to construction survey

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8th November 2023 23:43 - Construction

London drops out of the 'most expensive cities to build in' top 10 rankings for the first time: An annual construction survey has revealed that London is no longer one of the top 10 most expensive cities to build in, ranking outside of the top 10 in 12th position with an average build cost of US $3,879 per sqm.

The survey by Turner and Townsend revealed that six U.S. cities ranked in the top 10, including New York (with an average build cost of $5,451 per sqm) and San Francisco ($5,200) in first and second place.

In third and fourth were cities in Switzerland, Geneva and Zurich, followed by  Japan's Tokyo and Osaka in fifth and sixth positions. Occupying the final four places in the top 10 were four further U.S. cities including Boston, Los Angeles, Chicago and Seattle.

Also outside of the top 10 for the first time was Hong Kong, falling into 11th position with an average build cost of (US $4,292).

In its 14th year, the International Construction Market Survey compiles data and viewpoints from 89 worldwide markets. Its purpose is to chart critical issues, track trends, and provide insights into the challenges and opportunities encountered by the global construction sector.

Leading sectors 2023

The leading sectors identified in the 2023 survey remained mostly consistent, with the industrial, manufacturing, and distribution sector maintaining its top position, primarily fuelled by the sustained expansion of e-commerce. This was followed by residential and social housing and transport infrastructure in third position. Data centres also maintained their fourth position, with sustained investment throughout the decade poised to sustain their strong performance.

Commercial office development moved from fifth to ninth place, which the survey attributes to premium construction costs and the enduring prevalence of work-from-home arrangements suppressing demand. Conversely, this shift is propelling growth in the corporate occupier sector (office fit-outs), elevating it from seventh to fifth place in this year's survey.

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