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1、India Construction Creating ResilienceCBRE RESEARCHREPORTCost TrendsDECEMBER 2022ContentsIntroductionChapter 2What does it mean for construction costs?Chapter 4Movement in office fit-out costsChapter 6AnnexureChapter 1 Navigating amid uncertaintyChapter 3How input material prices impact overall cost
2、s?Chapter 5 Outlook remains positive021IntroductionAfter agriculture and retail,the construction industry is the largest employment generator in India and hence is a crucial indicator of the state of the economy.1 With linkages to industries such as cement,steel,chemicals,paints,tiles,etc
3、.,the construction industry also has a strong connection to the real estate sector.Further,with the country having the potential to become the third largest construction market globally in terms of size by the end of 20222,the industry has been high on the governments reforms and development agenda.
4、Although the construction sector continues to recover from pandemic-related challenges,the resulting impact over the past two years has altered many of the typical approaches that were used earlier to manage construction cost practices.With this report,CBRE Research has elucidated how a confluence o
5、f events have impacted key input construction materials and how macroeconomic factors are likely to impact overall construction costs.1 Periodic Labour Force Survey,MosPI2 India Brand Equity FoundationSource:CBRE Research,Q3 2022;Oxford Economics;Ministry of Statistics&Programme Implementation(MoSPI
6、)FIGURE 1:Snapshot of the Indian construction industryContributes to 8%of the countrys total GDPOne of the largestemployers in thecountryRising foreign direct investmentGreater adoption of ESG,technology and wellnessDirect linkages with commercial real estateIndirect linkages with morethan 250+ancil
7、lary industriesChapter 1 Navigating amid uncertaintyWhat drives construction costs?The year 2020 was underpinned by pandemic-induced uncertainties,supply chain disruptions and a significant slowdown in construction activity.As the pandemic waned and vaccination rates improved,many global markets,inc
8、luding India,witnessed rapid resurgence in construction activity in 2021.While recovery remains on track in 2022,the industry continues to face challenges such as stressed regional supply chains due to the Russia-Ukraine conflict and Chinas ongoing pursuit of zero COVID-19 along with surging inflati
9、on globally.The imposition of Western sanctions on Russian oil exports have led to a substantial increase in the Brent crude oil prices,driving up energy costs.This price volatility has impacted shipping and other supply chain-related costs and led to a rise in construction material costs in the Asi
10、a Pacific region.Macroeconomic and geopolitical headwinds had already pressured distribution networks and revealed the vulnerability of supply chains since the onset of the pandemic.So,despite the gradual alleviation of supply chain bottlenecks,global and regional disruption persists;preventing supp
11、ly chains from normalising to pre-pandemic levels.These supply chain bottlenecks have resulted in a backlog of shipments,leading to the scarcity of select construction materials and increased lead times.3While the inflationary pressures in India are milder than that in the US and Europe,a rapid incr
12、ease in the prices of oil,natural gas and coal,along with agricultural commodities,have led to rising cost pressures related to raw materials and other components,many of which are required for construction projects.Despite the waning impact of the pandemic and initiation of numerous new constructio
13、n projects,ongoing challenges continue to ripple through the construction cost chain.A mix of internal and external forces have created a set of interconnected factors that continue to drive construction costs up.Figure 1.1 illustrates how these interconnected challenges impact the industry,how each
14、 one affects certain costs and how those impacts indirectly drive up costs of other factors.3Lead Times-The amount of time that elapses since placing an order for a material till its delivery on siteFigure 1.1:Impact on interconnected cost driversSource:CBRE Strategic Investment Consulting,April 202
15、2;CBRE Research,Q3 2022TIME OVERRUNS LABOUR SHORTAGESMATERIAL SHORTAGESSUPPLY CHAINBOTTLENECKSDisruptions along the logistics chain,and high energy,equipment and material pricesRISING INPUT COSTSCONTRACT-RELATED UNCERTAINTY Stringent criteria related to quality and safety,high liability costsExtra d
16、ays of labour,equipment,overhead and other costsSubstituting with moreexpensive productsIncrease in material costs,spike in costs during periods of heightened construction activityNon-availability of skilled talent,rising wages to retain talent,training costs3 CBRE RESEARCH2022 CBRE,INC.Creating Res
17、ilienceIndia Construction Cost T rendsTABLE 1.1:Construction cost drivers CBRE has dissected the underlying components of greenfield construction costs and identified three key areas that are driving them materials,labour and fuel prices.A nominal shift in prices of any one of these three components
18、 does not necessarily translate into an increase in the final cost;however,prices of certain materials such as cement and steel,and labour wages generally represent a larger share of the total construction cost.A fluctuation in these prices can thus impact overall cost significantly.Key Cost Drivers
19、MATERIALS Cement and steel are some of the key materials driving costs.Building size and type are major factors,since the super structure determines the type and amount of primary materials used.Supply chains,local/regional taxes and other logistical factors play a major role in the cost of material
20、s,especially when the demand is high.Despite growth in construction employment,skilled labour shortages are likely to persist in the short term.Fuel prices will primarily be affected by how the current geopolitical crisis in Europe unfolds,amidst a global slowdown risk situation.Goldman Sachs lowere
21、d their oil price forecast further in November 2022 owing to possibility of further lockdowns in China and lack of clarity on the G-7 Russian oil cap.4LABOUR Labour costs will not only include wages and benefits but also cost of training unskilled staff.Labour shortages exert pressure on labour cost
22、s either via increased wages to attract more workers or requiring overtime to complete jobs when short staffed.FUEL PRICES The introduction of Western sanctions on Russian oil exports have led to a substantial increase in Brent crude oil prices,driving up energy costs.This price volatility has impac
23、ted shipping and other supply chain-related costs.Cost driversOutlook4CNBCSource:CBRE Strategic Investment Consulting,April 2022;CBRE Research,Q3 2022 Supply chain disruptions have started abating,but labourshortages as well as inflationary pressures would weigh onproduction capacity.Skilled labour
24、shortages are likely to lead to higher constructionlabour costs going forward as well.Long lead times and material shortages likely to continue in theshort term.Escalation in material prices has moderated,a scenario that islikely to continue until end-2022;a marginal rise is possible in2023 owing to
25、 the current geopolitical crisis in Europe.Chapter 2What does it mean for construction costs?In this section,we highlight greenfield construction costs across leading real estate asset classes and their growth trajectory post COVID-19.Average greenfield construction costs across asset classes in Ind
26、iaTABLE 2.1:Greenfield construction costs across asset classes in Q3 2022(in INR/sq.ft.)Asset ClassSegmentDelhi-NCRMumbaiBangalore,Chennai,HyderabadPuneINR/sq.ft.USD/sq.ft.INR/sq.ft.USD/sq.ft.INR/sq.ft.USD/sq.ft.INR/sq.ft.USD/sq.ft.ResidentialLow rise-5 floors2,170 244026.7-30.02,280 2,56028.0-31.52
27、,090 2,34025.7-28.82,120 2,37026.1-29.1Mid rise-12 floors2,875 3,18035.3-39.13,020 3,34037.1-41.12,760 3,05033.9-37.52,820 3,10034.7-38.1High rise-30 floors5,160 5,57063.4-68.55,410 5,83066.5-71.74,950 5,34060.9-65.75,030 5,42061.8-66.64,085 4,52050.2-55.63,925 4,34048.3-53.44,000 4,41049.2-54.2Offi
28、ceMid rise-12 floors3,030 3,33037.3-40.93,200 3,5002,910 3,20035.8-39.32,950 3,26036.3-40.1High rise-20 floors3,640-3,94044.8-48.43,500 3,80043.0-46.73,560 3,85043.8-47.3RetailShopping centre/mall4,250 4,65052.2-57.24,450 4,8504,080 4,47050.2-55.04,150 4,540Mixed use with retail-10 to 12 floors4,850
29、 5,25059.6-64.55,100 5,50062.7-67.64,650 5,05057.2-62.14,740 5,14058.3-63.2Hotel3 Star6,920 7,63085.1-93.87,250 8,0006,650 7,33081.8-90.16,750 7,4504 Star10,360 11,480127.4-141.110,850 12,000133.4-147.59,950 11,010122.3-135.410,120 11,200124.4-137.75 Star13,800 15,270169.7-187.714,450 16,000177.6-19
30、6.713,250 14,665162.9-180.3Resorts14,950 16,530183.8-203.215,700 17,300193.0-212.714,370 15,870176.7-195.114,600 16,130Service ApartmentMid rise5,860 6,27072.0-77.16,150 6,57075.6-80.85,630 6,01069.2-73.95,720 6,12070.3-75.2HospitalHospitals5,560 6,06568.4-74.66,500 7,20079.9-88.55,430 5,83066.8-71.
31、75,420 5,92066.6-72.8IndustrialLight industrial2,630 2,83032.3-34.82,760 2,97033.9-36.52,530 2,72031.1-33.42,560 2,76031.5-33.9Heavy industrial4,250 4,65052.2-57.24,450 4.88054.7-60.04,080 4,46050.2-54.84,150 4,54051.0-55.8WarehouseWarehouse&logistics1,360 1,82016.7-22.41,900 2,20023.4-27.01,310 1,7
32、4016.1-21.41,330 1,78016.4-21.9Basement&Car Park3 basement2,280 2,57528.0-31.72,380 2,70029.3-33.22,180 2,48026.8-30.52,220 2,52027.3-31.02 basement2,130 2,43026.2-29.92,220 2,54027.3-31.22,040 2,32025.1-28.52,070 2,37025.4-29.11 basement1,970 2,28024.2-28.02,060 2,39025.3-29.41,900 2,19023.4-26.91,
33、930 2,22023.7-27.3Standalone1,570 1,72519.3-21.21,650 1,80020.3-22.11,510 1,66018.6-20.41,530 1,68018.8-20.7Source:CBRE Project Management;CBRE Research,Q3 2022 Note:The data provided depicts an average range of costs and CBRE advises its readers to exercise discretion when referring to it.USD 1=INR
34、 81.346 CBRE RESEARCH2022 CBRE,INC.Creating Resilience4,300 4,74052.9-58.339.3-43.03,820 4,14047.0-50.954.7-59.651.0-55.889.1-98.483.0-91.613,460 14,900165.5 183.2179.5-198.3India Construction Cost T rendsVillas-100 nos.&aboveFluctuation in greenfield construction costs across asset classesNote:Fluc
35、tuation here is reflected as a change in costs when compared to Q4 2020.Source:CBRE Project Management;CBRE Research,Q3 2022%change from basequarter(Q4 2020)Delhi-NCRMumbaiBangaloreHyderabadChennaiPuneDelhi-NCRMumbaiBangaloreHyderabadChennaiPuneDelhi-NCRMumbaiBangaloreHyderabadChennaiPuneDelhi-NCRMu
36、mbaiBangaloreHyderabadChennaiPuneH1 2021H2 2021H1 20222022 YTDH1 2021H2 2021H1 20222022 YTDH1 2021H2 2021H1 20222022 YTDH1 2021H2 2021H1 20222022 YTD%change from basequarter(Q4 2020)%change from basequarter(Q4 2020)%change from basequarter(Q4 2020)15%10%5%0%15%10%5%0%15%10%5%0%15%10%5%0%Residential(
37、High-rise:12 floors)Ofice(High-rise:20 floors)Retail(Shopping centre/mall)Hotel5 star7 CBRE RESEARCH2022 CBRE,INC.Creating ResilienceIndia Construction Cost T rendsFluctuation in greenfield construction costs across asset classesNote:Fluctuation here is reflected as a change in costs when compared t
38、o Q4 2020.Source:CBRE Project Management;CBRE Research,Q3 2022%change from basequarter(Q4 2020)Delhi-NCRMumbaiBangaloreHyderabadChennaiPuneDelhi-NCRMumbaiBangaloreHyderabadChennaiPuneDelhi-NCRMumbaiBangaloreHyderabadChennaiPuneDelhi-NCRMumbaiBangaloreHyderabadChennaiPuneH1 2021H2 2021H1 20222022 YTD
39、H1 2021H2 2021H1 20222022 YTDH1 2021H2 2021H1 20222022 YTDH1 2021H2 2021H1 20222022 YTD%change from basequarter(Q4 2020)%change from basequarter(Q4 2020)%change from basequarter(Q4 2020)15%10%5%0%15%10%5%0%15%10%5%0%15%10%5%0%Service Apartment(Mid-rise)HospitalIndustrial(Heavy Industry)Warehouse8 CB
40、RE RESEARCH2022 CBRE,INC.Creating ResilienceIndia Construction Cost T rendsChapter 3How input material prices impact overall costs?Uptick in key input material costs during H1 2022Rise in inflation,the current geopolitical crisis in Europe and supply chain disruptions due to lockdowns restrictions i
41、n China led to a rise in input costs of key construction materials such as steel,cement,aluminium and PVC,elevating their prices in H1 2022 in India.Consequently,the Indian government undertook several measures in May 2022 to curb this price rise.These steps included a waiver of customs duty on the
42、import of key raw materials for steel production and a hike in export duties on iron ore and steel intermediaries to improve domestic availability.The government also announced cuts in the central excise duty on petrol and diesel to rein in their domestic prices as oil prices grew globally.Further,m
43、easures are being planned to increase cement supply and ease prices through improved logistics and the use of multi-modal transport.These measures,along with a slight moderation in demand due to muted construction activity typically witnessed during the monsoon season in India and cooling off of glo
44、bal commodity prices such as those of crude oil and steel in the recent months,have led to a slight tempering of construction costs since May-June 2022.As of today,the outlook for construction costs remains stable but cautious,as market volatility is likely to persist in 2023 with continued monetary
45、 tightening,persistently high inflation rates,a possibility of recession in developed economies and geopolitical turmoil-related challenges.10 CBRE RESEARCH2022 CBRE,INC.Creating ResilienceIndia Construction Cost T rendsCBRE input material cost indexCBRE Research arrived at the input material cost i
46、ndex to understand the change in key input material prices over the past two years of heightened volatility(base year 2020).Rather than looking at price fluctuations in input costs in isolation,the index aims to give a holistic view of the impact that these fluctuations have had over the past two ye
47、ars.Since all input materials do not impact construction costs equally,we identified the top high-impact components(steel,cement,glass,labour,metals,plumbing,fuel,amongst others)and assigned them weightages basis their usage and impact on overall construction costs.Price trends for these input mater
48、ials are explained in the upcoming sections.In order to smoothen out the index,volatility scoring was assigned which measured the change these input materials have witnessed since 2020(on a scale of 1-5).A sum of the weightage along with the score has been considered as the cost index value.0.00.51.
49、01.52.02.53.03.54.04.55.0Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022Q3 20222022E2023EIndexFigure 3.1:CBRE input material cost index for IndiaSource:CBRE Project Management;CBRE Research,Q3 202211 CBRE RESEARCH2022 CBRE,INC.Creating ResilienceIndia Construction Cost T rendsCBRE input material cost ind
50、ex set to stabilise in 2023Increase in material prices resulted in a sharp uptick in the CBRE input material cost index across most cities in H1 2022.This uptick was relatively sharper in cities such as Delhi-NCR,Bangalore,Hyderabad and Chennai.Resolution of certain supply chain disruptions and redu
51、ction in price pressures in Q3 2022 brought about a directional swing and reduction in the index across most cities.We expect this trend to continue till the end of 2022.Looking ahead,inflationary pressures are widely expected to abate in 2023.This,alongside the resolution of supply chain disruption
52、s and more active policy intervention from the government,might limit hikes in material prices.Consequently,the index is expected to rise only marginally in 2023.FIGURE 3.2:City-wise CBRE input material cost indexSource:CBRE Project Management;CBRE Research,Q3 2022ChennaiBangalorePuneMumbaiHyderabad
53、Delhi NCR2.64.53.43.62.34.13.43.62.84.54.04.23.64.74.34.62.63.93.43.52.84.63.43.42022E2023EH1 2022202112 CBRE RESEARCH2022 CBRE,INC.Creating ResilienceIndia Construction Cost T rends-20-15-10-505101520020,00040,00060,00080,000Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022Q3 2022(INR/MT)-25-20-15-
54、10-5050300350400450Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022Q3 2022(%change)(%change)(%change)(INR/Bag)NCR-DelhiMumbaiBangaloreChennaiHyderabadPuneQ-o-Q(%)0246800350Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022Q3 2022(INR/KG)NCR-DelhiMumbaiBang
55、aloreChennaiHyderabadPuneQ-o-Q(%)NCR-DelhiMumbaiBangaloreChennaiHyderabadPuneQ-o-Q(%)Figure 3.3:Cement price trendFigure 3.4:Reinforcement Steel price trendFigure 3.5:Aluminium price trendSource:CBRE Project Management;CBRE Research,Q3 202213 CBRE RESEARCH2022 CBRE,INC.Creating ResilienceIndia Const
56、ruction Cost T rendsCity-wise input material cost trendsY-o-Y change-IndicatorTABLE 3.1:City-wise material cost trends(in INR terms)ItemDescription(Unit)Delhi-NCRMumbaiBangaloreChennaiHyderabadPuneCement300330270320280270Steel61,00068,00061,50060,00068,50058,00070,00078,00068,00076,00072,00068,000Cl
57、ear Glass70 10070-10070-10070-9070 9070-90120 150100 -150Stone200 - -0080075080050-9050-9050-9050-8040-7040-7050-7050-7050-7050-7040-6040-60Wood2,2002,2002,4002,0002,2002,00070-10070-10070-
58、10070-10070-10075-100Paint3,500-4,0003,500-4,0003,500-4,0003,000-3,5003,000-4,0003,000-4,000Metals-350250 - -350250 -350Plumbing750-1,100800-1,200750 1,-1,000675-1,05065-12075-18075-17065-11065-- 8503
59、00--700-0 to 20%-21 to 40%-41 to 60%-61 to 80%-81 to 100%0 to 20%21 to 40%41 to 60%61 to 80%81 to 100%Source:CBRE Project Management;CBRE Research,Q3 202214 CBRE RESEARCH2022 CBRE,INC.Creating ResilienceGrade 53(INR/Bag)Reinforcement(INR/MT)Structural Steel(INR/MT)6mm(INR/sq.ft.)8mm(INR
60、/sq.ft.)Granite(INR/sq.ft.)Marble(INR/sq.ft.)Makrana(INR/sq.ft.)Kota(INR/sq.ft.)Cuddappa(INR/sq.ft.)Salwood(INR/cu.ft.)Plywood 12mm Thk(INR/sq.ft.)Emulsion(INR/20 ltr)Aluminium(INR/kg)Stainless Steel(INR/kg)GI Pipe-50mm-80mm C Class Heavy(INR/m)Upvc 32mm-50mm(INR/m)CPVC 25mm-50mm SDR 11(INR/m)India
61、Construction Cost T rendsCity-wise input material cost trendsY-o-Y change-IndicatorTABLE 3.2:City-wise material cost trends(in USD terms)ItemDescription(Unit)Delhi-NCRMumbaiBangaloreChennaiHyderabadPuneCement3.74.13.33.93.43.3Steel7508367567388427934885836Clear Glass0.9-1.20.9-1.20.9-1.20
62、.9-1.10.9-1.10.9-1.11.5-1.81.5-1.81.5-1.81.2-1.81.2-1.81.2-1.8Stone2.5-4.92.5-4.92.5-4.92.5-4.32.5-4.32.5-4.93.7-9.83.7-9.83.7-9.82.5-8.62.5-9.23.7-9.81010109100.6-1.10.6-1.10.6-1.10.6-0.90.6-0.90.6-0.90.6-0.90.5-0.70.5-0.7Wood27302527250.9-1.20.9-1.20.9-1.20.9-1.20.9-1.20.9-1.2Paint36.9-49.236.9-49
63、.2Metals3.1-4.33.1-4.33.1-4.33.1-3.73.1-3.73.1-4.33.7-4.33.7-4.33.7-4.33.1-3.73.1-3.73.7-4.3Plumbing9.2-13.59.8-14.89.2-13.57.4-10.48.-12.38.3-12.90.8-1.50.9-2.20.9-2.10.8-1.40.8-1.40.8-1.53.7-9.23.7-10.43.7-10.43.7-8.6-0 to 20%-21 to 40%-41 to 60%-61 to 80%-81 to 100%0 to 20%21 to 40%41 to 60%61 to
64、 80%81 to 100%Source:CBRE Project Management;CBRE Research,Q3 2022USD 1=INR 81.3415 CBRE RESEARCH2022 CBRE,INC.Creating ResilienceGrade 53(USD/Bag)Reinforcement(USD/MT)Structural Steel(USD/MT)6mm(USD/sq.ft.)8mm(USD/sq.ft.)Granite(USD/sq.ft.)Marble(USD/sq.ft.)Makrana(USD/sq.ft.)10Kota(USDsq.ft.)0.6-1
65、.00.5-0.90.5-0.9Cuddappa(USD/sq.ft.)Salwood(USD/cu.ft.)27Plywood 12mm Thk(USD/sq.ft.)Emulsion(USD/20 ltr)43.0-49.243.0-49.243.0-49.236.9-43.0Aluminium(USD/kg)Stainless Steel(USD/kg)GI Pipe-50mm-80mm C Class Heavy(USD/m)Upvc 32mm-50mm(USD/m)CPVC 25mm-50mm SDR 11(USD/m)3.7-8.03.7-8.0India Construction
66、 Cost T rendsSupply-demand imbalance fuelling rise in labour wages Construction industry is one of the largest employers in India.However,COVID-19-induced lockdown restrictions and the resultant migration led to a dramatic dip in the labour pool.That dip has been reversed in 2022 and overall employm
67、ent in the sector is on track to return to pre-pandemic levels.In order to retain skilled workers amid the current labour shortage,many employers increased wages,benefits and incentives.Consequently,average hiring costs for skilled,semi-skilled and unskilled labour increased by about 8 10%on an annu
68、al basis TABLE 3.3:Labour wage overview as of Q3 2022ChennaiBangalorePuneMumbaiHyderabadDelhi NCRINR 700/dayINR 605/dayINR 555/dayINR 690/dayINR 595/dayINR 545/dayINR 680/dayINR 585/dayINR 535/dayINR 680/dayINR 585/dayINR 535/dayINR 670/dayINR 575/dayINR 525/dayINR 680/dayINR 585/dayINR 535/daySkill
69、ed labourSemi-skilled labourUnskilled labourSource:CBRE Project Management;CBRE Research,Q3 202216 CBRE RESEARCH2022 CBRE,INC.Creating Resiliencein Q3 2022 across the country.India Construction Cost T rendsChapter 4Movement in office fit-out costs Inflationary pressures and supply chain disruptions
70、have resulted in an increase in office fit-out costs as well.We highlight the movement in these costs in this section.FIGURE 4.1:Office fit-out costs across leading cities in India(in INR/sq.ft.)DELHI NCRHYDERABADBANGALORECHENNAIMUMBAIPUNESource:CBRE Project Management;CBRE Research,Q3 2022Note:Rate
71、/sq.ft.on RSF(Rentable Square Footage is the total square footage that equals the usable square footage plus the tenants pro rata share of the buildings common areas)Asset ClassItemQ3 2021Q4 2021Q1 2022Q2 2022Q3 2022Q-o-Q(%change)Delhi NCRPremium8,1358,3808,3808,3808,5852.4High6,8557,0657,0657,0657,
72、2352.4Medium4,6554,7954,7954,7954,9152.5Basic3,2353,3303,3303,3303,4152.6MumbaiPremium8,5408,7958,7958,7959,0553.0High7,2007,4207,4207,4207,6302.8Medium4,8855,0305,0305,0305,1803.0Basic3,4003,5053,5053,5053,6052.9BangalorePremium8,1358,3808,3808,3808,5852.4High6,8557,0657,0657,0657,2352.4Medium4,655
73、4,7954,7954,7954,9152.5Basic3,2353,3303,3303,3303,4152.6ChennaiPremium8,1358,3808,3808,3808,5852.4High6,8557,0657,0657,0657,2352.4Medium4,6554,7954,7954,7954,9152.5Basic3,2353,3303,3303,3303,4152.6HyderabadPremium7,8958,1358,1358,1358,3302.4High6,6556,8556,8556,8557,0202.4Medium4,5154,6504,6504,6504
74、,7652.5Basic3,1403,2353,2353,2353,3102.3PunePremium7,8958,1358,1358,1358,3302.4High6,6556,8556,8556,8557,0202.4Medium4,5154,6504,6504,6504,7652.5Basic3,1403,2353,2353,2353,3102.3INR 8,600-9,510INR 7,250-8,010INR 4,920-5,440INR 3,420-3,790PremiumHighMedium BasicINR 8,160 9,010INR 6,870 7,600INR 4,670
75、 5,160INR 3,240 3,590INR 7,910 8,750INR 6,670 7,370INR 4,530 5,000INR 3,140 3,48018 CBRE RESEARCH2022 CBRE,INC.Creating ResilienceIndia Construction Cost T rendsFIGURE 4.2:Office fit-out costs across leading cities in India(in USD/sq.ft.)DELHI NCRHYDERABADBANGALORECHENNAIMUMBAIPUNESource:CBRE Projec
76、t Management;CBRE Research,Q3 2022Note:Rate/sq.ft.on RSF(Rentable Square Footage is the total square footage that equals the usable square footage plus the tenants pro rata share of the buildings common areas)Asset ClassItemQ3 2021Q4 2021Q1 2022Q2 2022Q3 2022Q-o-Q(%change)Delhi NCRPremium
77、31062.4High84878787892.4Medium57595959602.5Basic40414141422.6MumbaiPremium81113.0High89919191942.8Medium60626262643.0Basic42434343442.9BangalorePremium31062.4High84878787892.4Medium57595959602.5Basic40414141422.6ChennaiPremium31062.4High84878787892.4Medium57595959602
78、.5Basic40414141422.6HyderabadPremium9722.4High82848484862.4Medium56575757592.5Basic39404040412.3PunePremium9722.4High82848484862.4Medium56575757592.5Basic39404040412.3USD 106-117USD 89-98USD 60-67USD 42-47PremiumHighMedium BasicUSD 84-93USD 57-63USD 40-44USD 97-108USD 82-91USD
79、56-62Note:1 USD=INR 81.3419 CBRE RESEARCH2022 CBRE,INC.Creating ResilienceUSD 100-111USD 39-43India Construction Cost T rendsCivil&interior works,furniture and MEP works drive fit-out costs Soft cost-Consultancy charges Civil&interior works-Civil&interior works&modular false ceiling Flooring works-R
80、aised flooring works&carpet works Furniture-Workstations,meeting room tables,office&meeting room chairs,loose furniture MEP works-Plumbing,internal electrical works,luminaries&LMS,UPS system,BMS,HVAC low side distribution,CRAC units,FPS&ELV system,access control system,CCTV system Networking passive
81、 works-Cabling AV equipment Video conferencing equipment for meeting rooms Active components Racks in the server room Miscellaneous-Signage,graphics,baggage scanner,kitchen equipment,preliminaries and housekeeping,HSEFIGURE 4.2:Office fit-out cost breakup Note:Blocks not to scale,for representation
82、purpose only Percentages of the fit-out cost breakup provided in Figure 4.2 are indicative of a typical office fit-out project;therefore,CBRE advises clients to exercise caution and engage in professional services for precise percentages based on the clients unique requirements.Source:CBRE Project M
83、anagement;CBRE Research,Q3 20225%Soft CostCivil&interior WorksFurnitureMEP WorksNetworking Passive WorksAV EquipmentActive componentMiscellaneousFlooring Works6%7%6%25%22%19%17%24%28%32%35%2%3%3%4%4%4%4%3%5%4%4%3%5%5%5%4%4%5%5%5%26%23%21%22%PREMIUMMEDIUMBASICHIGH20 CBRE RESEARCH2022 CBRE,INC.Creatin
84、g ResilienceIndia Construction Cost T rendsChapter 5Outlook remains positive(100)(50)050100Q1Q2Q3Q4Q1Q2Q3Q4Q-222022-23GVA at basic priceConstructionTrade,hotels,transport,communication and services related to broadcastingFinancial,real estate&professional servicesPublic administration,De
85、fense&other servicesConstruction industry will continue to be on a growth trajectoryDespite the moderation in growth projections and global headwinds,construction activity is expected to remain strong in the near term.As the government remains committed towards infrastructure development and real es
86、tate growth across the country,overall construction activity has remained buoyant.Consequently,key indicators of construction activity-steel consumption and cement production-reported a strong growth in H1 2022.In addition,owing to sustained recovery in contact-intensive sectors,gross value added(GV
87、A)at basic prices for construction services expanded by 16.8%Y-o-Y in Q1 2022-23 and was 1.2%above the pre-pandemic level.Figure 5.1:Sector-wise growth in GVA(gross value added)Source:RBI Monetary Policy Report,September 202222 CBRE RESEARCH2022 CBRE,INC.Creating ResilienceIndia Construction Cost T
88、rendsStrong supply pipeline across asset classes to aid construction activityConstruction activity has accelerated post the pandemic.Almost 950 million sq.ft.of project completions across office,I&L,retail and residential sectors are anticipated by the end of 2024.Office:The sector has witnessed a s
89、teady growth in development completions over the past five years(2020 being the only blip),with more than 200 million sq.ft.of space being added to the office universe between 2017 and 2021.We anticipate construction activity to strengthen in the coming years as developers line up a strong supply pi
90、peline exceeding 100 million sq.ft.in the next two years.I&L:This sector witnessed a spurt in development completions between 2019 and 2021.,with more than 60 million sq.ft.of warehousing space becoming operational during the period.While warehouse space addition has remained relatively slow this ye
91、ar,we expect it to pick up pace in Q4 2022.Moreover,gradual recovery in construction activity seems to be on the cards in the coming years,with almost 50 million sq.ft.of warehousing space expected to be added in the next two years.Retail:Following the pandemic,construction activity in the sector ha
92、s remained on the growth curve.The years 2021 and 2022 together are likely to witness the addition of more than 8 million sq.ft.of mall space.Further,we expect a sharper growth graph for construction activity in this sector in the times to come as more than 12 million sq.ft.of mall space is likely t
93、o become operational over the next two years.Residential:Construction activity in this space remained in the top gear through 2022 nearly 261 million sq.ft.of project launches were witnessed during the year while 222 million sq.ft.were completed.We expect developers to sustain this growth momentum i
94、n the coming years.Figure 5.2:Construction completions across major asset classesSource:CBRE Research,Q3 2022OficeRetailI&LResidential00702002020212022 F2023 F2024 FMillion Sq.ft.05002020212022 F2023 F2024 FMillion Sq.ft0.01.02.03.04.05.06.07.08.09.0201720
95、0212022 F2023 F2024 FMillion Sq.ft05003003502002020212022 F2023 F2024 F(000)Number of Units23 CBRE RESEARCH2022 CBRE,INC.Creating ResilienceIndia Construction Cost T rendsMaterial2-year annualised%change(2020 2022 F)1-year average%change(2022 2023 F)Greenfield cost f
96、or an office(high-rise)4 5%4 5%Cement6 7%3 5%Steel5 7%2 4%Labour5 7%6 8%Fuel9 11%2 4%Costs for key construction materials expected to stabiliseSource:CBRE Project Management;CBRE Research,Q3 2022,TABLE 5.1:Cost trends for key construction materials 24 CBRE RESEARCH2022 CBRE,INC.Creating ResilienceIn
97、dia Construction Cost T rendsESGHealth&WellnessTechnologyWellness or sustainability certification which entails upfront costs and higher CapEx along with a certification fee is one of the primary costs of sustainability implementation.However,the long-term goal of adopting sustainable practices or c
98、ertification is lower CapEx over time which would also help in achieving a rental premium.Effectiveness of ESG implementation becomes visible in the long term in the form of increased/renewed investor interest,staff retention,health and engagement of employees.Cost implications of sustainable initia
99、tives can be reduced if sustainable components are included in the early stages of building design.Developers and occupiers can also become eligible for green financing by reaching certain sustainability and emissions milestones throughout the lifecycle of a project.During 2020,the construction indu
100、stry not only faced pandemic-induced challenges,but also battled the brunt of additional costs brought forward by the necessary health and wellness initiatives.Overall impact of costs related to health initiatives such as sanitization,periodic health check-ups,labour maintenance,additional insurance
101、 requirements on construction cost during 2020-21 was to the tune of 4-5%.Quick relaxations in lockdown restrictions across major cities resulted in lowering of the costs related to maintenance of COVID-19 protocols in 2021-22 and the impact of health and wellness initiatives on the overall costs ca
102、me down to 2-3%.As more than 2 billion vaccination doses have been administered in India so far,10 positivity rates have started to decline.CBRE anticipates that for the year 2022-23,the impact of health&wellness initiatives on the overall cost will further come down to around 1.5-2%.Considering the
103、 lessons learnt during the pandemic,organizations that are fast-tracking digitization by augmenting their technological collaboration capabilities,automating low value-added activities and sharing data for insight-driven decision-making are likely to not only find operations easier,but may also cont
104、rol costs better.Solutions such as Building Information Modelling(BIM)and integrated project management platforms have started to find widespread usage.COVID-19 has accelerated technological adoption as developers looked to reduce their reliance on labour and expedite construction activity.Thus,we e
105、xpect to see a wider usage of tech in construction and construction management in the future as corporates realise its long-term efficiencies and cost advantages.FIGURE 5.3:Emerging trends in the construction space10Ministry of Health and Family Welfare25 CBRE RESEARCH2022 CBRE,INC.Creating Resilien
106、ceIndia Construction Cost T rendsChapter 6AnnexureASSET CLASS SPECIFICATIONS FOR GREENFIELD COSTSAsset ClassSegmentSpecificationResidentialLow rise-5 floorsMedium-quality finishes with nominal external facilitiesMid rise-12 floorsHigh-quality finishes with good external facilitiesHigh rise-30 floors
107、Shear wall with high-quality finished with good external facilitiesHigh-end finishes with air conditioning and false ceilingOfficeMid rise-12 floorsHigh rise-20 floorsRetailShopping centre/mallComposite structure,glazing,warm shell with all high-side MEP ready for anchor tenant and other retailers t
108、o occupyMixed retail-10 to 12 floorsHotel3 starStandalone hotels,moderate finishes,focused public areas excluding operation supplies4 starStandalone hotels,high-end finishes,focused public areas excluding operation supplies5 starStandalone hotels;luxury finishes with well-laid public areas,multiple
109、restaurants and banquetsResortsLow-rise,high-end finishes with more ground coverage;provision for leisureService ApartmentMid riseStandalone 1,2,3-bed configuration,minimal public areas and restaurants and kitchensHospitalHospitalsCorporate hospital-grade with all the prescribed facilities with medi
110、cal infra excluding medical equipmentIndustrialLight industrialLight industrial use with well laid out doors with heavy duty flooring and partial equipment liftingHeavy industrialHeavy industry-like care and manufacturing with all utilitiesWarehouseWarehouse&logisticsPEB structure with heavy-duty fl
111、ooring with minimal MEP worksBasement&Car Park3 basementRaft,retaining wall,water proofing with subsoil drains;the car park does not have provision for mechanical parking2 basementRaft,retaining wall,water proofing with subsoil drains;the car park does not have provision for mechanical parking1 base
112、mentRaft,retaining wall,water proofing with subsoil drains;the car park does not have provision for mechanical parkingStandaloneStandalone building with parking main criteria;the car park does not have provision for mechanical parkingFlat slab,glazing,warm shell with all high-side MEP ready for tena
113、nt fitoutFlat slab,glazing,warm shell with all high-side MEP ready for tenant fitoutVillas-100 nos.&aboveFIT-OUT COST SPECIFICATIONSDescriptionSpecificationsPremium LevelHigh LevelMedium LevelBasic LevelCivil&interiors worksHigh end&premium finishes for partitions,cladding,acoustic finishesPartition
114、s 160 mm thickness,double glazed partitions&doors,motorized blinds for meeting rooms,high-end veneer/acrylic finishes,acoustic requirements,imported motorized foldable partitionsPartitions 120mm thickness,imported single glazed partitions,manual blinds,high-end finishes,indigenous semi motorized fol
115、dable partitionsPartitions 90mm thickness,indigenous single glazed partitions,manual blinds,manual foldable/non-foldable partitionsRaised flooring worksFor total carpet areaFor total carpet areaCarpet worksUse of premium productsINR 2,250/sq.m.INR 1,875/sq.m.INR 1,500/sq.m.Modular false ceiling work
116、sUse of premium productsHigher acoustic ceilings,sprays/techzone ceiling/metallic ceiling etcAcoustic ceilings/grid ceiling/gypsum ceiling etcGrid ceiling/Gypsum ceiling/open ceilings etcWorkstationsUse of premium productsHAT motorized imported WS,cost approx.INR 90,000HAT manual/motorized WS,Cost a
117、pprox.INR 60,000 to 75,000Fixed,approx.INR 41,250Office&meeting room chairsUse of premium productsImported approx.INR41,250Approx.INR 30,500 to 37,500 30 min backupModular N+1 30 min backupConventionalConventionalHVAC low side distributionThermo diffusers,N+1 configuration for critical areasThermo d
118、iffusers,N+1 configuration for critical areasN+1 configuration for critical areasNormal SpecsCRAC unitsN+NN+NN+1N+1 Normal SpecsFPS&ELV systemGSS,RRS,Grove coupling,GI pipesGSS,RRS,Grove coupling,GI pipesGI Pipes with weldingMS pipes with weldingKitchen equipmentReheating provision/Full-fledged kitc
119、henReheating provision/Full-fledged kitchenReheating provisionReheating provisionNetworking passive worksHigher specsMedium specsLower specsAV equipmentHigher specsMedium specsLower specsPremium specsPremium specsFor workstation areaFor workstation areaMumbaiDelhi-NCR,Bangalore&ChennaiHyderabad&Pune
120、PremiumHighMediumBasicPremiumHighMediumBasicPremiumHighMediumBasicSoft Cost/Consultancy Charges------215Civil&Interiors Works1,902 2,1041,374 1,-7031,805 1,9931,302 1,-6651,750 1,9351,265 1,397778-85
121、9582-645Modular False Ceiling Works317 351265 293159-17685-93301 332251 278151-16780-89291 323244 269147-16178-87Plumbing Works127 140127 14096-10663-70120 133120 13391-10060-67116 129116 12988-9658-64Signage&Graphics69 7669 7653 5937-4165-7265 7251-5635-3963 7063 7050-5434-38Preliminaries and House
122、keeping,HSE 11769 7637- 11165-7235-3997 10897 10863-7034-38Raised Flooring Works 11785 9369- 11180-8965-7297 10897 10878-8663-70Carpet Works 234159 -221200 -111194 215194 215147-16197-108Workstations1,057 1,169793 877423
123、 467265-2931,003 1,- 1,076731 -269Meeting Room Tables106 117106 11779 8853-59100 111100-11175-8351-5697 10897-10873-8149-54Office&Meeting Room Chairs582 643371 409238 - -241146-161Loose Furniture423 468317 35
124、0159 - -16197-108Internal Electrical Works528 584529 584423 - -429315-349Luminaries&LMS265 293159 176127 14079-88251 -13375-83244 -12973-81UPS System85 9485 9358 6448-5
125、280 8980-8955-6145-5078 8778-8753-5944-49HVAC Low Side Distribution486 538486 537423 -- -429315-349CRAC Units106 117106 11779 8853--11175-8351-5697 10897-10873-8149-54FPS&ELV System211 234211 234159 --167100-11
126、1194 -16197-108Building Management System79 8879-8858 6437-4175-8375-8355-6135-3973 8173-8153-5934-38Access Control System85 9485-9363-7037-4180-8980-8960-6635-3978 8778-8758-6434-38CCTV System85 9485-9342-4732-3680-8980-8940-4431-3478 8778-8739-4329-32Baggage Scanner/Turnstiles53 5953-
127、5942-4732-3651-5651-5640-4431-3450 5450-5439-4329-32Kitchen Equipment211 234127-14079-8842--13375-8340--12973-8139-43Networking Passive Works211 -----161116-129AV Equipment317 --332301-
128、--323194-21597-108Active Components449 -----323194-215Total8,600 9,5147,251 8,0104,922 5,4413,423 3,7898,158 9,0096,869 7,6044,671 5,1603,241 3,5927,908 8,7536,670 7,3744,530 4,9993,140 3,482TABLE 6.1:Fit-out
129、cost breakup as of Q3 2022(in INR)Source:CBRE project Management;CBRE Research,Q3 202229 CBRE RESEARCH2022 CBRE,INC.Creating ResilienceIndia Construction Cost T rendsMumbaiDelhi-NCR,Bangalore&ChennaiHyderabad&PunePremiumHighMediumBasicPremiumHighMediumBasicPremiumHighMediumBasicSoft Cost/Consultancy
130、 Charges5.2-5.85.2-5.73.9-4.32.6-2.94.9-5.44.9-5.43.7-4.12.5-2.74.8-5.34.8-5.33.6-42.4-2.6Civil&Interiors Works23.4-25.916.9-18.710.4-11.57.8-8.622.2-24.516-17.79.9-10.97.4-8.221.5-23.815.6-17.29.6-10.67.2-7.9Modular False Ceiling Works3.9-4.33.3-3.62-2.21-1.13.7-4.13.1-3.41.9-2.11-1.13.6-43-3.31.8-
131、21-1.1Plumbing Works1.6-1.71.6-1.71.2-1.30.8-0.91.5-1.61.5-1.61.1-1.20.7-0.81.4-1.61.4-1.61.1-1.20.7-0.8Signage&Graphics0.8-0.90.8-0.90.7-0.70.5-0.50.8-0.90.8-0.90.6-0.70.4-0.50.8-0.90.8-0.90.6-0.70.4-0.5Preliminaries and Housekeeping,HSE1.3-1.41.3-1.40.8-0.90.5-0.51.2-1.41.2-1.40.8-0.90.4-0.51.2-1.
132、31.2-1.30.8-0.90.4-0.5Raised Flooring Works1.3-1.41.3-1.41-1.10.8-0.91.2-1.41.2-1.41-1.10.8-0.91.2-1.31.2-1.31-1.10.8-0.9Carpet Works2.6-2.92.6-2.92-2.21.3-1.42.5-2.72.5-2.71.9-2.11.2-1.42.4-2.62.4-2.61.8-21.2-1.3Workstations13-14.49.7-10.85.2-5.73.3-3.612.3-13.69.2-10.24.9-5.43.1-3.412-13.29-9.94.8
133、-5.33-3.3Meeting Room Tables1.3-1.41.3-1.41-1.10.7-0.71.2-1.41.2-1.40.9-10.6-0.71.2-1.31.2-1.30.9-10.6-0.7Office&Meeting Room Chairs7.2-7.94.6-52.9-3.22-2.26.8-7.54.3-4.82.8-3.11.9-2.16.6-7.34.2-4.62.7-31.8-2Loose Furniture5.2-5.83.9-4.32-2.21.3-1.44.9-5.43.7-4.11.9-2.11.2-1.44.8-5.33.6-41.8-21.2-1.
134、3Internal Electrical Works6.5-7.26.5-7.25.2-5.74.2-4.76.2-6.86.2-6.84.9-5.44-4.46-6.66-6.64.8-5.33.9-4.3Luminaries&LMS3.3-3.62-2.21.6-1.71-1.13.1-3.41.9-2.11.5-1.60.9-13-3.31.8-21.4-1.60.9-1UPS System1-1.21-1.10.7-0.80.6-0.61-1.11-1.10.7-0.70.6-0.61-1.11-1.10.7-0.70.5-0.6HVAC Low Side Distribution6-
135、6.66-6.65.2-5.74.2-4.75.7-6.35.7-6.34.9-5.44-4.45.5-6.15.5-6.14.8-5.33.9-4.3CRAC Units1.3-1.41.3-1.41-1.10.7-0.71.2-1.41.2-1.40.9-10.6-0.71.2-1.31.2-1.30.9-10.6-0.7FPS&ELV System2.6-2.92.6-2.92-2.21.3-1.42.5-2.72.5-2.71.9-2.11.2-1.42.4-2.62.4-2.61.8-21.2-1.3Building Management System1-1.11-1.10.7-0.
136、80.5-0.50.9-10.9-10.7-0.70.4-0.50.9-10.9-10.7-0.70.4-0.5Access Control System1-1.21-1.10.8-0.90.5-0.51-1.11-1.10.7-0.80.4-0.51-1.11-1.10.7-0.80.4-0.5CCTV System1-1.21-1.10.5-0.60.4-0.41-1.11-1.10.5-0.50.4-0.41-1.11-1.10.5-0.50.4-0.4Baggage Scanner/Turnstiles0.7-0.70.7-0.70.5-0.60.4-0.40.6-0.70.6-0.7
137、0.5-0.50.4-0.40.6-0.70.6-0.70.5-0.50.4-0.4Kitchen Equipment2.6-2.91.6-1.71-1.10.5-0.62.5-2.71.5-1.60.9-10.5-0.52.4-2.61.4-1.60.9-10.5-0.5Networking Passive Works2.6-2.92.6-2.92-2.21.6-1.72.5-2.72.5-2.71.9-2.11.5-1.62.4-2.62.4-2.61.8-21.4-1.6AV Equipment3.9-4.33.9-4.32.6-2.91.3-1.43.7-4.13.7-4.12.5-2
138、.71.2-1.43.6-43.6-42.4-2.61.2-1.3Active Components5.5-6.15.5-6.13.9-4.32.6-2.95.2-5.85.2-5.83.7-4.12.5-2.75.1-5.65.1-5.63.6-42.4-2.6Total105.7-11789.1-98.560.5-66.942.1-46.684.4-93.557.4-63.439.8-44.297.2-107.655.7-61.538.6-42.8TABLE 6.2:Fit-out cost breakup as of Q3 2022(in USD)Note:1 USD=INR 81.34
139、 Source:CBRE project Management;CBRE Research,Q3 202230 CBRE RESEARCH2022 CBRE,INC.Creating Resilience100.3-110.882-90.7India Construction Cost T rendsContactsResearchAbhinav Joshi Head of Research-India,Middle East&North Africaabhinav.joshicbre.co.inVidhi DheriAssociate Director,Head of Oper-ations
140、,North&West Indiavidhi.dhericbre.co.inUttara NilawarSenior General MMohamed Atif KhanSenior MNeha GuheSenior ASankar RamakrishnanDirector,Head of Cost CDivya GoyalExecutive Director,Head of Investment Risk Monitoringdivya.goyalcbre.co.inPankaj TekchandaniSenior Associate DirectorConsulting&Valuation
141、s,Indiapankaj.tekchandanicbre.co.inBusiness LineFollow UsResearchCBRE ResearchThis report was prepared by the CBRE India Research Team,which forms part of CBRE Researcha network of preeminent researchers who collaborate to provide real estate market research and econometric forecasting to real estat
142、e.All materials presented in this report,unless specifically indicated otherwise,is under copyright and proprietary to CBRE.Information contained herein,including projections,has been obtained from materials and sources believed to be reliable at the date of publication.While we do not doubt its acc
143、uracy,we have not verified it and make no guarantee,warranty or representation about it.Readers are responsible for independently assessing the relevance,accuracy,com-pleteness and currency of the information of this publication.This report is presented for information purposes only exclusively for
144、CBRE clients and professionals,and is not to be used or considered as an offer or the solicitation of an offer to sell or buy or subscribe for securities or other financial instruments.All rights to the material are reserved and none of the material,nor its content,nor any copy of it,may be altered
145、in any way,transmitted to,copied or distributed to any other party without prior express written permission of CBRE.Any unauthorized publication or redistribution of CBRE research reports is prohibited.CBRE will not be liable for any loss,damage,cost or expense incurred or arising by reason of any p
146、erson using or relying on information in this publication.To learn more about CBRE Research,or to access additional research reports,please visit the Global Research Gateway at Line ContactsAdvisory&Transactions Ram Chandnani Managing Director,Advisory&Transaction Services,India ram.chandnanicbre.co
147、.in Capital MarketsGaurav KumarManaging Director&Co-Head,Capital Markets,India gaurav.kumarcbre.co.inGlobal Workplace SolutionsRajesh PanditManaging Director,Global Workplace Solutions,India&Property Management,India,SE Asia,Middle East&North Africa rajesh.panditcbre.co.inOperationsRajat GuptaManagi
148、ng Director,Operations,India Consulting&ValuationRami Kaushal Managing Director,Consulting&Valuations,India,Middle East&Africa rami.kaushalcbre.co.in Capital MarketsNikhil BhatiaManaging Director&Co-Head,Capital Markets,India gaurav.kumarcbre.co.inProject ManagementGurjot BhatiaManaging Director,Project Management,India,SE Asia,Middle East&Africa gurjot.bhatiacbre.co.in