Nairobi and Dar es Salaam are among the five cheapest cities in the world to develop property, notes a new report by global construction and project management consultancy firm Turner & Townsend.
Construction works will cost the least in Nairobi while Dar is the fifth cheapest, among 43 key cities surveyed.
The 2017 International Construction Market Survey assessed the average cost of six types of buildings: High-rise apartments, prestige office blocks, large warehouses, a general hospital, primary and secondary schools and shopping centres, including malls in key cities.
The average cost of constructing any of the six types of buildings per square metre in Nairobi is $683.49, ahead of Bangalore, where it costs $697.43. In Beijing it costs $724.64 per square metre; Warsaw $782.05 and Dar es Salaam $803.52 per square metre.
Kigali was rated Africa’s most expensive city to build, costing $1,117.12 per square metre, ahead of Kampala and Johannesburg where the average cost stands at $1,058.99 and $848.30 per square metre respectively.
Sector to expand
The report comes in the wake of increased developer interest in East Africa’s booming construction sector, which, according to a Frost & Sullivan report, is expected to expand by $3 billion in the next six years.
Hass Petroleum Group, one of the world’s largest construction companies is currently developing Hass Towers, Africa’s tallest building, in Nairobi at a cost of about $200 million.
June, Bechtel Corporation, the largest construction and civil engineering company in the US, opened its continental office in Nairobi.
Globally, New York City has overtaken Zurich as the most expensive city in which to build, with an average cost of $3,807 per square metre, followed by San Francisco at $3,549 per square metre and Zurich at $3,528 per square metre.
Generally, the vast majority of markets experienced construction cost inflation with only four seeing no or negative growth in construction costs. The report forecasts global construction costs to grow 3.5 per cent in 2017, slightly lower than the 3.7 per cent in 2016.