Nairobi has emerged as one of the top five most cost-effective cities for construction globally, according to a new report by Turner & Townsend, a global consultancy firm. The survey, covering the first quarter of 2024, indicates that the average cost of building in Nairobi is Ksh100,000 (USD784.9) per square meter, significantly lower than the world’s most expensive cities.
In Africa, Harare, Zimbabwe tops the list as the most expensive city for construction, followed by Lagos, Nigeria; Kigali, Rwanda; Cape Town, South Africa; and Kampala, Uganda. Gaborone, Botswana, and Johannesburg, South Africa follow in the rankings.
“Dislocated supply chains, coupled with a persistent stop-start cycle of financing, delayed approvals, and bureaucratic complexities, continue to challenge construction programmes. One consequence has been an increase in programme lengths – with delays commonly stretching to over five weeks in Nairobi, Lagos, Cape Town, and Harare,” the report states.
The report details construction costs across various African cities:
- Harare: USD1,992.7 per square meter
- Lagos: USD1,539.8 per square meter
- Kigali: USD1,131 per square meter
- Kampala: USD1,088.3 per square meter
- Gaborone: USD1,034.4 per square meter
- Johannesburg: USD988.4 per square meter
Factors impacting construction costs in Africa include economic instability, government red tape, rising construction costs, contractor insolvency, difficulties accessing credit, political instability, and skilled labor shortages.
In Nairobi’s Central Business District (CBD), the cost for constructing high-rise prestige offices averages Ksh132,000 per square meter, while medium offices up to 20 floors cost Ksh94,500. Advanced manufacturing facilities cost Ksh115,500, large warehouse distribution centers cost Ksh70,000, high-rise apartments also cost Ksh70,000, and townhouses of medium standard cost Ksh60,000 per square meter.
Labor costs in Nairobi are detailed in the report, with plumbers, electricians, tilers, and bricklayers earning Ksh250 per day, green collar installation operatives earning Ksh300, laborers earning Ksh100, and site foremen earning Ksh375 daily. The cost to hire a 50-tonne mobile crane and operator for a day is Ksh100,000, with hourly rates varying from Ksh8,000 depending on the equipment.
Globally, New York, USA, is the most expensive city to build in, with an average cost of USD5,723 per square meter. San Francisco, USA, follows at USD5,489, and Zurich, Switzerland, ranks third at USD5,035.4.
“As clients look to decarbonize their assets, and as states put legislation in place to encourage greater carbon efficiency, competition for green collar skills – and the associated costs – will continue to rise,” the report concludes.
Recent Comments