Tokyo Most Expensive City for Construction
Tokyo was named the world’s most expensive city for construction. The Japanese capital was awarded the somewhat unenviable gold medal for building costs in the Turner & Townsend International Construction Market Survey for 2021 which took stock of the global construction industry in 90 markets across 45 countries. The research found that the construction cost per square meter in Tokyo averages $4,002. It is the first time that the Japanese capital topped the ranking and costs there were driven by robust growth and an extensive pipeline of real estate and infrastructure projects that pushed up demand for resources. The growing cost of building projects in Tokyo have been reflected by the Olympic price tag which was initially estimated at $7.3 billion when the city won the hosting rights for the event back in 2013. That was later revised upwards to $12.6 billion by the bid committee in December 2019, just before the event was postponed due to Covid-19. Aside from the Olympics and regarding construction in Japan in general, the country remains the world’s third-largest economy with a population of 126 million and a reputation for sophisticated technological prowess. Turner & Townsend noted that global investors including U.S. tech giants are especially interested in real estate in Japan as it offers the potential for significant e-commerce growth given that consumer take-up remains behind China and Europe. A stable power grid and proximity to Asian hubs are further factors counting in its favor. The report places Hong Kong second in the global construction cost league where projects average $3,894 per square meter while San Francisco rounds off the top three at $3,720 per square meter. Together with fourth-placed New York, those markets have historically sat within the top-ten positions in the ranking.