USD 21.9/hr USD 2.8/hr Risky Business: 12 Surprising Facts About Construction in Emerging Markets © Jones Lang LaSalle 2013 Do you know what’s really going on? www.jll.com SOUTH AFRICA INDIA TURKEY RUSSIA BRAZIL UAE MEXICO SAUDI ARABIA CHINA AUS US VS. 92% in Malaysia 40 - 50% in US Difficulties importing and delivering construction materials to site can cause significant delays in Vietnam and Indonesia that’s equivalent to 83 Empire State Buildings x 83 $ $ Hong Kong 6 vs. India 35 UK CONSTRUCTIONGROWTH 9/10 countries with the strongest net portfolio growth forecast are emerging markets The top 8 countries for net portfolio growth are 2-3 times less transparent real estate markets than mature economies, such as the US, UK and Australia 8% 38% 12% 20% 31% 13% 16% 11% 44% 5% In Mumbai demand for space in the key CBDs is very strong and Grade A office stock will more than double by 2020 China’s 4 largest cities will see construction of 178M sq ft of Grade A office space by 2020 WHERETHINGSGOWRONG construction projects running over time or budget Smells associated with paint, new furniture and glue can cause significant delays when handing over projects in China fluctuation in material pricing = most common cause of cost over runs in Malaysia PROJECTSTAKELONGERANDCOSTMORE It takes 5 times the number of procedures to build a warehouse in India than in Hong Kong Disputes on projects in India can take more than 4 years to be resolved from filing a suit to recieving a payment The cost of trade contractors can be up to 8 times more expensive in China than in Singapore India 7.6% Indonesia 4.9% Vietnam 6.9% Asia Pacific 3.5% Australia 2.6% Japan 2.1% High price inflation forecasts continue to push up construction costs across Asia -12% 1% Jones Lang LaSalle, Global Corporate Real Estate Trends. 2013 Jones Lang LaSalle, Global Real Estate Transparency Report, 2012 Jones Lang LaSalle, Real Estate Intelligence Service, 2013 Construction Management Association of America, Annual Survey of Owners, 2009 International Journal of Advances in Applied Sciences (IJAAS), March 2012 Canadian Center of Science and Education, Relationship between factors of construction resources affecting project cost in Malaysia, 2013 The World Bank, Global logistics performance index, 2012 The World Bank, Doing Business, Dealing with Construction Permits, 2013 The World Bank, Doing Business, Enforcing contracts, 2013 Deloitte, 2013 Global Manufacturing Competitiveness Report, 2013 IHS, Data Insight 2013, consumer price inflation, annual growth Construction Management Understanding local market nuances is critical to the success of any construction project. Here are some things you need to know when managing real estate projects in Asia’s emerging markets.
Risky Business: 12 surprising facts about construction in emerging markets
Aug 19, 2015
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USD 21.9/hr USD 2.8/hr
Risky Business: 12 Surprising Facts About Construction in Emerging Markets
© Jones Lang LaSalle 2013
Do you know what’s really going on?www.jll.com
SOUTHAFRICAINDIA TURKEY RUSSIA BRAZIL UAE MEXICO SAUDI
ARABIA CHINA AUS US
VS.
92% in Malaysia
40 - 50% in US
Difficulties importing and delivering construction materials to site cancause significant delays in Vietnam
and Indonesia
that’s equivalent to83 Empire State Buildings
x 83
$$
Hong Kong 6 vs. India 35
UK
CONSTRUCTIONGROWTH9/10 countrieswith the strongestnet portfolio growth forecastare emerging markets
The top 8 countries for net portfolio growth are 2-3 times less transparent real estate markets than mature economies, such as the US, UK and Australia
8%
38%
12% 20%
31%
13% 16% 11%
44%
5%
In Mumbaidemand for space in the key
CBDs is very strong and Grade A office stock will
more than double by 2020China’s 4 largest cities will see construction of178M sq ft of Grade A office space by 2020
WHERETHINGSGOWRONG
constructionprojects running
over time or budget
Smells associated with paint, new furniture and glue can cause significant delays whenhanding over projects in China
fluctuation inmaterial pricing
=most commoncause of cost
over runsin Malaysia
PROJECTSTAKELONGERANDCOSTMORE
It takes 5 times the number of procedures to build a warehouse in India than in Hong Kong
Disputes on projectsin India can take morethan 4 years to beresolved from filing a suit to recieving a payment
The cost of trade contractors can be up to 8 times more expensive in Chinathan in Singapore
India 7.6%Indonesia 4.9%Vietnam 6.9%
Asia Pacific 3.5%Australia 2.6%
Japan 2.1%
High price inflationforecasts continue topush up constructioncosts across Asia
-12%1%
Jones Lang LaSalle, Global Corporate Real Estate Trends. 2013
Jones Lang LaSalle, Global Real Estate Transparency Report, 2012
Jones Lang LaSalle, Real Estate Intelligence Service, 2013
Construction Management Association ofAmerica, Annual Survey of Owners, 2009
International Journal of Advances in Applied Sciences (IJAAS), March 2012
Canadian Center of Science and Education, Relationship between factors of constructionresources affecting project cost in Malaysia, 2013
The World Bank, Global logistics performance index, 2012
The World Bank, Doing Business, Dealing with Construction Permits, 2013
The World Bank, Doing Business, Enforcing contracts, 2013
Deloitte, 2013 Global Manufacturing Competitiveness Report, 2013
IHS, Data Insight 2013, consumer price inflation, annual growth
ConstructionManagement
Understanding local market nuances is critical to the success of any construction project. Here are some things you need to know when managing real estate projects in Asia’s emerging markets.
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