Singapore is the priciest Asian nation to build in excluding Japan and one of the 10 most expensive in the world, said a new report released by consultancy firm EC Harris.
The company’s international construction cost report, which covers 50 nations, ranked Singapore as the 10th most expensive country to build in globally. Hong Kong, the second most expensive nation in Asia, is ranked 21st worldwide.
The report excludes values for Japan, as the company did not have any projects there in the past two years. Tender prices in Tokyo are generally around 20 to 30 percent higher than in Hong Kong and Singapore.
Richard Warburton, regional head of cost and commercial management in Asia at EC Harris, said Singapore is still the most expensive Asian nation to build in excluding Japan in spite of a 5 to 8-percent decline in tender prices in 2009.
“The Singapore market appears to be recovering on the back of sustained demand and strong economic growth,” Mr. Warburton told The Business Times. “We are also seeing localised ‘hot’ markets, such as the substantial amount of new office building fit-out activity that is under way.”
This may lift tender prices further and create pressures on the supply chain. General tender prices may grow 3 to 5 percent over the coming years, depending on the increase of commodity prices, he said.
Based on EC Harris’ study, which benchmarks the building cost in every nation against the UK, Singapore’s construction prices are nearly 7 percent higher compared to the UK, which saw its construction prices fall nearly 20 percent from its 2009 peak.
Hong Kong, the closest Asian counterpart to Singapore on the expensive list, is at 7 percent below the UK benchmark. Hong Kong also has the greatest uncertainty in tender price inflation in Asia, said Mr. Warburton.
Also included in the top five most expensive Asian nations are Thailand, South Korea and China. Meanwhile, Sri Lanka is ranked as the cheapest Asian nation to build in, at 27 percent of the UK’s construction cost.