The planning, allocation and deployment of capital is perhaps the most critical element of a successful construction project. The construction industry – always subject to rapidly changing labor markets and materials costs – has faced the added burden this year of COVID-19’s effects on manufacturing, labor, transportation and health and safety requirements.
CBRE’s Global Cost Trends Guide captures data from 134 cities in 75 countries to shed light on both current and prospective cost trends across North America, EMEA, Asia Pacific and Latin America.
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CBRE’s Global Cost Trends Guide remains the most comprehensive analysis of office pricing across all regions and is an evolution of CBRE’s annual Cost Fit-Out Guides (2019-20 Global Series). The intention of this report is to provide insight on macro trends with a future-looking perspective on cost variations and what we may see changing through 2021.
The COVID-19 pandemic has brought challenges to the commercial fit-out industry. While countries respond with different levels of restrictions, there are many similarities in the way in which the fit-out markets have adjusted within them.
This 2020-21 CBRE Global Cost Trends Guide presents a consolidated view on the key changes in the four regions: North America, EMEA, Asia Pacific and Latin America. We have analyzed and presented the cost variance from last year’s Regional Fit-Out Cost Guides through the data and experience of CBRE’s in-country resources. Their knowledge of local markets has also contributed to forming an understanding of how projects may be managed going forward and some of the key issues that may be faced locally.
For many office workers, the living room has now become the boardroom and with client CAPEX budgets tightening across the world, project pipelines in all regions are being cut as clients search for cost saving measures. Consistently, each region is experiencing a flattening and even slight decrease of construction costs, particularly due to contractors pricing down in their bids (tenders) to remain competitive. This also counteracts the additional costs associated with COVID-19 safety measures and extensions of schedules due to decreased capacities on sites. We should expect to see an increase in construction costs in 2021 as contractors see work return or potentially determine their price cuts are not sustainable given the added increase in costs associated with COVID-19 safety requirements.