FEATURES Table 5-1 Large Shopping Centers (Including Malls) Year-Over-Year Percent Change
2013 Building Cost Per Square Meter in Local Currency
Australia Canada China
Germany India
Ireland Japan
Malaysia Russia
Singapore
South Africa South Korea
United Arab Emirates United Kingdom United States Vietnam
Source: Turner & Townsend
prices have stopped increasing and are even starting to recede. The outlook for material prices is for more stability for the next few years except in overheated regions where local market conditions create lower levels of competition.
3) Import costs. Since the Global Financial Crisis (GFC) in 2008, imported building material and equipment prices have been reasonably benign. Inflation in the price of manufactured goods from key suppliers— Germany, Italy, the United States, and China—has been low. However, falling exchange rates in importing countries, such as South Africa, India and even the United States, have added to imported costs.
Regional Overviews North America Together, the United States and Canada represent a
very large market with huge differentials between different regions. (In the United States, for instance, as a general rule, the large “closed-shop” cities of the Northeast will have far higher costs than the “open-shop” cities of the
A$ C$
CNY EUR INR EUR Y
MYR RUB S$
ZAR KRW DHS GBP US$ VND
2,000-2,400 2,100-2,500 5,000-7,000 2,000-2,400
35,000-50,000 2,100-2,300
300,000-320,000 4,200-4,500
46,000-50,000 3,000-3,300 7,000-10,000
1,650,000-1,850,000 6,000-7,000 2,400-2,800 1,600-2,500
13,000,000-16,000,000
(calculated from midpoints of building cost ranges)
2011 0.0%
-1.0 3.1 3.0 8.0
-6.0 -2.0 3.0 5.0 4.0 2.5
-2.0 -7.0 0.0
-6.0 8.0
2012 1.0% 1.5 1.6 2.8 8.5
-2.0 0.0 4.8 8.0 3.5 6.0 0.0
-4.0 2.0 2.0
11.0
2013 2.0% 1.0 5.0 2.4
14.0 2.0 2.0 3.7 7.0 3.3 9.0 3.0 3.0 1.0 2.0 8.0
South.2) Overall in both countries, construction costs are forecast to escalate 2% to 4% year-on-year. After declining 6% and 7%, respectively, in 2011, both
large and neighborhood shopping-center construction costs increased in 2012 and 2013 in the United States. Building costs per sq m) for 2013 range from $1,100 to $1,600 for neighborhood shopping centers (including supermarkets) and $1,600 to $2,500 for large shopping centers (including malls).3 These slight gains occurred as the U.S. economy is
showing signs of recovery, with most broad indicators improving. Unemployment levels have fallen from post- GFC highs of 10% to about 7.5%. Higher housing values and record-low interest rates have helped improve household balance sheets in the post-GFC period with debt-service ratios down to historic lows. U.S. consumer spending, which accounts for nearly 70% of the Gross Domestic Product (GDP), also has fully recovered from the recession. Canada’s economy also is experiencing sustainable growth due to its strong natural-resources– based economy.
2 “Closed-shop” refers to employer agreements to hire only union members, whereas an “open shop” does not. 3 Throughout this article, specific regional data can be found in particular tables. Data on large shopping centers (including malls) can be found in Table 5-1; neighborhood shopping centers, Table 5-2; hourly labor costs, Table 5-3; and cost of concrete (cubic meters), Table 5-4.
INTERNATIONAL COUNCIL OF SHOPPING CENTERS 21 2 RETAIL PROPERTY INSIGHTS VOL. 20, NO. 2, 2013
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