FEATURES Table 5-4 Cost of Concrete (Cubic Meters) (Material Only-Delivered) Year-Over-Year Percent Change
2013 Cost of Concrete (m3) 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
residential and gas-plant construction program, is now also preparing for the 2022 World Cup. All of the Middle East countries are major importers of
low-cost construction labor from South Asian countries, which helps to keep overall costs down, but a high level of imported materials and equipment is common. Leisure facilities and high-quality dining are turning shopping centers into popular meeting places away from the desert heat. With its smaller population but aggressive construction program, Qatar is experiencing the highest cost growth, followed by Abu Dhabi.
South Africa South African construction costs are comparatively less
expensive in global terms with retail construction costs of ZAR7,500-9,000 in neighborhood centers and ZAR7,000- 10,000 in large shopping centers. However, due to high wage increases and the devaluing of the rand, costs increased 3% for neighborhood centers and 6% for large centers in 2012. The South African economy is the most mature in
Africa, with higher incomes and well-established suburban shopping centers. Construction activity slowed after the country hosted the 2010 World Cup, where much effort was poured into updating infrastructure and amenities.
INTERNATIONAL COUNCIL OF SHOPPING CENTERS 24 5
A$ C$
CNY EUR INR EUR Y
MYR RUB S$
ZAR KRW DHS GBP US$ VND
225 170
(calculated from midpoints of concrete- cost ranges)
2011 4.0% 3.0
450 10.0 110
5,525 80
12,138 240
4,650 155
1,340
81,500 260 85
125 1,215,778
2.5 8.0 3.0 2.0 3.0 4.0 3.0 8.0 3.0 2.0 2.0 2.0 8.0
2012 4.0% 3.0
12.0 2.5
10.0 3.0 2.0 3.0 4.0 3.0
10.0 3.0 3.0 2.0 2.0 8.0
2013 4.0% 3.0 5.0 2.5
11.0 5.0 2.0 3.0 3.5 3.0 9.0 3.0 4.0 1.0 2.0 8.0
Since then, high inflation has affected construction costs. Wages are low but annual increases of up to 8% are entrenched by a strong labor movement, causing construction costs to keep increasing. Recently the South African Rand has weakened. High dependence on imported foreign manufactured goods also adds to the pressure on construction costs, with a forecast cost escalation ranging from 6% to 10%.
India Construction wages, like construction costs, are low in
India, but they are increasing quickly. This trend is expected to continue over the medium term as more international retail brands establish a presence in India and labor costs continue to mount. Current construction costs range between INR24,000 and INR30,000 for neighborhood centers and between INR35,000 and INR50,000 for large malls. The Indian economy is on a solid growth path,
especially in Mumbai, Delhi, Chennai, Bangalore and Hyderabad. Incomes, the size of the middle class and demand for quality retail are all rising. India has one of the fastest-growing retail sectors outside China with up to 700,000 sq m under construction. The Indian rupee has recently fallen in value, adding
significantly to imported costs. Furthermore, shortages of power and water to new construction sites often create
RETAIL PROPERTY INSIGHTS VOL. 20, NO. 2, 2013
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