Research

Construction Cost Guide book

This guide is a powerful tool designed to help you understand the market trends, construction cost of real estate assets across major markets of India.

March 05, 2021
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Covid19 impact on Indian real estate has been unprecedented. Many organisations are now restructuring their capital plans as they deal with pressures to reduce costs and defer non-essential expenditure, and much of their capital spending is being directed towards technologies which will empower employees to adopt remote working efficiently.

The “Construction Cost Guide Book” is our attempt to help our readers understand the construction cost of real estate assets across major geographies of India and provide some guidance to prepare you for what we call ‘the next normal’. This guide also includes a cost matrix representing different building types, an analysis of market trends of the major building materials which helps you take informed decisions during this unprecedented time.

An interesting section in this report is the indices on cost of key materials, labour, procurement model, contract forms and construction for the 6 cities. This guide will serve as a benchmarking tool to analyse the cost of construction in your geography.

  • The abundance of well qualified professionals and lower establishment cost has resulted in many international companies in considering India as their potential business support destination.
  • India is projecting itself as 'the' destination to invest. With the alignment of government policies with investors' needs, it is estimated that manufacturing, data centres, healthcare, life sciences sectors will grow in the next 5 years.
  • With the evolving market dynamics, clients' focus on procurement strategy has increased. While the item rate contract remains the primary contracting model in the country, the design & build model is gaining prominence
  • The impact of COVID 19 on market benchmark rates has been neutral to significant, depending on the asset classes. Based on our analysis we have seen cost impact of 5-6% on existing green field & interior fit-out projects
  • The cost of construction is highest in Mumbai which is on average 10% higher than other metros, across asset classes.
  • Hyderabad and Chennai have the lowest average construction costs where costs are about 14% lesser than Mumbai.

 

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