BT : S'pore still cheaper to build in than HK and London: DLS

Business Times - 17 Aug 2010

S'pore still cheaper to build in than HK and London: DLS

Data refutes earlier report that S'pore is costliest Asian country to build in

By UMA SHANKARI

SINGAPORE is still a much cheaper place to build than Hong Kong and London, the director of Davis Langdon & Seah Singapore (DLS) said yesterday - refuting an earlier report that found otherwise.

DLS data shows that at end-Q1 2010, construction costs in Singapore for standard apartments, standard office space and 'prestige' office space were lower than those in London, Tokyo, Sydney and Hong Kong.

'Cost data recorded by our offices in the region has clearly established that Singapore is the third costliest city to build in (in the region) after Tokyo and Hong Kong,' DLS director Seah Choo Meng told BT in an interview.

Construction costs in London and Sydney have also been consistently higher than in Singapore, he said.

Mr Seah was responding to a report released two weeks ago by EC Harris that said Singapore is now the most expensive Asian country to build in except Japan and the 10th most expensive worldwide. This was despite a 5-8 per cent drop in tender prices here last year, EC Harris said.

Tender prices here were higher than in Hong Kong and London, according to EC Harris's international construction cost report covering 50 countries. Switzerland was the most expensive country to build in globally, the report found. Hong Kong was ranked 21st globally while the UK - or London - was ranked 16th.

Yesterday, Mr Seah presented DLS data that shows building costs in Singapore are lower than those in London, Tokyo, Sydney and Hong Kong.

The two firms collect data from their worldwide offices from the jobs they handle. The EC Harris report did not include values for Japan because the firm did not have any projects there in the past two years.

The differentiation between the DLS and EC Harris data is partly caused by a difference in how much each of them said tender prices in Singapore fell last year.

The EC Harris report put the fall at between 5 and 8 per cent. But DLS put it at 20 per cent.

Mr Seah noted: 'The Building and Construction Authority's (BCA) record has shown a drop of 15 per cent; Rider Levett Bucknall (another consultancy) indicated a drop of 18.5 per cent while DLS saw a drop in the region of 20 per cent.'

EC Harris also said the Singapore market recovered on the back of sustained demand and strong economic growth - leading to tender price growth in the first six months of the year.

Mr Seah agrees the market recovered, but said tender prices have only climbed by 3 per cent since the start of this year - which means construction prices are still a long way from their peaks after last year's 20 per cent drop.

Although Singapore is not the most expensive city in Asia in which to build, BCA is looking at how to boost construction cost-efficiency to bridge a gap in productivity between Singapore and other advanced countries, Mr Seah said. The productivity of the construction industry in Singapore is only half of that in Australia's and one third of that in Japan.

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