Nairobi Ranked World’s Cheapest City for Construction

A new survey from Global programme management and construction consultancy firm Turner & Townsend has revealed  that Nairobi is the world’s cheapest city for construction, despite the high cost of land. The report highlights Nairobi as a favourable market condition with reasonable construction costs making it an attractive proposition for firms looking to grow their presence in the region.

The 2017 international construction market survey presented data analysed from 43 key markets around the world delivering greater insight into the global construction industry.

To identify the most expensive place to build, the average building costs in US Dollars of six different types of construction was assessed:

  • apartment high-rise
  • office block prestige
  • large warehouse distribution centre
  • general hospital
  • primary and secondary school
  • shopping centre including mall.

The average cost of constructing any of the above six types buildings per m² in Nairobi is USD 683.49 compared to Dar es Salaam, where it costs USD 803.52 per m². Kigali was rated Africa’s most expensive city to build, at USD 1,117.12 per m².

New York overtook Zurich as the most expensive city in which to build, with an average cost of USD3,806.92 per m² followed by San Francisco (USD3,549.17 per m2) and Zurich (USD 3,527.87 per m2). Other most expensive locations are Hong Kong and London.

Brazil, Russia, and South Africa are towards the top of the list as a result of their relatively high rates of inflation of around 5–6 percent, which leads to pressure to increase wages and higher costs of materials and plant equipment. Meanwhile Muscat, Paris and Singapore saw no increase in construction costs during 2016.

Top 5 Cheapest Cities to Build

The five cheapest places to build according to the report were Bangalore, Beijing, Dar es Salaam, Nairobi and Warsaw.

Last week, Bechtel Corporation; the largest construction and civil engineering company in the United States, and the 9th-largest privately owned American company announced the opening of its office in Nairobi.

Building costs per m2

In this survey, building costs per m², sometimes referred to as direct costs (as opposed to indirect costs), are for construction of the building, including preliminaries (or general conditions) costs and substructure, columns, upper floors, staircases, roof, external walls, external doors, internal walls, internal doors, wall finishes, floor finishes, ceiling finishes, fitments, plumbing, HVAC, fire protection, electrical and communication systems and transportation systems. It is assumed that building costs are based on the typical building standards and building methods for the region.

Download a table of the average cost of six building types in USD in all 43 markets;  T&T Construction report


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