Application and methodology
Using our cost index
This occupier cost index is meant to provide a picture of total project costs including the major cost components of construction, and IT & AV costs across different markets. It also arms Shell real estate professionals with some indicative high-level costs for a standard workplace in the corporate downtown and industrial office archetypes and insights to enable rich and informed conversations with their business partners during the annual OP exercise, or when discussing fitout opportunities further along in the pipeline.
The cost per sqm provided are at +/-50 percent range of accuracy and should not be used as a base for detailed costing. The costs per sqm are also not meant to scaled up or down parametrically, since functional space planning, building services, and IT & AV costs provisions will differ significantly when applied to larger or smaller floor areas.
For more details on the spatial assumptions used as a basis for the index, please access the “terms & references” section here.
Actual costs are dependent on building design, inclusions, exclusions, and site conditions. Cost comparisons between countries are subject to different interpretations, building methods, and standards for costing, measurement, and construction. Costs may vary substantially between regions within countries.
Turner & Townsend recommends in the first instance to seek the advice of a local Turner & Townsend representative or our real estate PMO team for consultation on cost estimates.
“It was a terrific opportunity to get in touch with and speak with cost management experts on a global scale while working on cost analysis for ICMS to acquire benchmarking data.”
Vinaya Chandra - Offshore PMO Analyst
Methodology
The cost values in this report have been converted to US Dollars to enable an insightful comparison which gives typical project costs per archetype in each country.
It should also be noted that a change in the exchange rate makes a significant difference: if a particular currency is strong compared to the base currency, the cost of construction looks expensive. It is not a reliable indicator of relative costs and efficiency of construction between countries.
Exchange rates
The exchange rates are extracted from Shell group’s Q3 2022 group macroeconomic tool here, and real estate professionals are recommended to factor in forecasted changes in exchange rates for projects planned in outer years.
Inflation forecasts
This report contains forward-looking construction price inflation data that are subject to risk factors associated with international and local market changes. It is to be noted, that at the time of this report’s publication, the expectations reflected in these indices are reasonable. However, given the current volatile market conditions and rapid pace at which market conditions have and are continuing to change, these forecasts may be affected and may no longer be valid.
Therefore, the inflation forecasts included in this report should be used only as a guide. Turner & Townsend recommends seeking the advice of a local Turner & Townsend representative for consultation regarding construction price inflation or to peer review inflation forecasts prior to their use.
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