PROPCAFE™ News : Kuala Lumpur the fourth least expensive city to build in Asia

PROPCAFE International Construction Cost 2018

Kuala Lumpur is the fourth least expensive city in Asia to build in, according to the International Construction Costs 2018 report published by Arcadis which details and ranks the relative cost of construction in 50 of the world’s major cities. In last year’s annual report from the leading global Design & Consultancy firm for natural and built assets, the Malaysian capital was the second cheapest.

twentyfive.7 by Gamuda Land Show Unit

Hong Kong is the most expensive city in Asia, followed by Macau and Singapore. Overall, San Francisco, New York and Hong Kong were the top three most expensive cities in which to build in the world. The relative strength of the U.S. dollar is a key factor influencing the positioning of cities in the index this year. The strong dollar places North American cities higher in the index compared to markets where the domestic currency is relatively weaker.

FORECAST CONSTRUCTION INDUSTRY VALUE, REAL GROWTH 2018. % YEAR ON YEAR CHANGE
FORECAST CONSTRUCTION INDUSTRY VALUE, REAL GROWTH 2018. % YEAR ON YEAR CHANGE

The report is published against the backdrop of a growing global economy in 2018. Following a stronger-than-expected 2017, countries around the world are experiencing an upturn, and this robust economic performance will accelerate the demand for construction around the world. China’s One Belt, One Road project is also contributing significantly to global construction demand, with over $900 billion of planned projects, from gas pipelines in Central Asia to high-speed railways in Indonesia.

The Asian cities ranking in Arcadis’ International Construction Costs Index are below:

Asian cities ranking in Arcadis’ International Construction Costs Index
Asian cities ranking in Arcadis’ International Construction Costs Index
  • Kuala Lumpur ranks least expensive among Southeast Asian cities, below Singapore, Brunei, Manila, Jakarta, Bangkok and Ho Chi Minh
  • With a new government, status of marque developments in KL is unknown

Country Head, Malaysia, commented: “As Malaysia enters a new political era, we encourage the government to consider how digitalization can boost the economy by improving productivity in the construction sector, which remains one of the least digitalized. Moving forward, we urge the industry to embrace technological advances to keep in step with the rest of the region.”

Which cities are most expensive for construction?

The relative strength of the U.S. dollar is a key factor influencing the positioning of cities in the index this year. The strong dollar places North American cities higher in the index compared to markets where the domestic currency is relatively weaker against the greenback.

This year we expanded the cities featured in our construction cost comparison to provide a spread of key construction markets around the world. New to the comparison are eight cities in the United States and Toronto in Canada, representing six of the top 10 cities. Australia’s Brisbane and Sydney have also been added, along with three cities in India – quoted from Arcadis

 INTERNATIONAL CONSTRUCTION COST COMPARISON, LOCATION FACTOR INDEX
INTERNATIONAL CONSTRUCTION COST COMPARISON, LOCATION FACTOR INDEX <Source : www.arcadis.com>

The full report can be downloaded here.
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Methodology
The comparative cost assessment of 50 cities is based on a survey of constructions costs undertaken
by Arcadis covering 13 building types. Costs are representative of the local specification used to meet
market needs. The building solutions adopted in each location are broadly similar and, as a result, the
cost differential reported represents differences in specification as well as the cost of labor and
materials. Construction costs are current as of Q4 2017.

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