Construction Cost Up 5-6% Due To Covid 19
The increased cost towards health and safety (setting up of quarantine facility, sanitation, thermal scanners and like), and skilled labour availability may have added to the increase in the cost of construction, says the JLL report. The rise in cost can be attributed to the procurement challenges faced by the vendors as they may have to procure from the first available source at a higher price, according to the report Covid-19 has led to an increase in the cost of construction, according to the Construction Cost Guidebook India published by JLL on 10th March. According to the report, the cost of construction of greenfield and interior fit-out projects have gone up by 5-6% due to covid-19. The pandemic led to a halt in construction activities and abrupt closure of certain construction sites and interruption in supply chains. The rise in cost can be attributed to the procurement challenges faced by the vendors as they may have to procure from the first available source at a higher price. Also, the increased cost towards health and safety (setting up of quarantine facility, sanitation, thermal scanners and like), and skilled labour availability may have attributed to the increase in the cost of construction. Material and transportation costs have also spiked due to demand and non-availability and transportation challenges. Once the supply chain reinstates, the prices shall return to normal, says the report. The report also analyses the cost of construction across major cities. The cost of construction is the highest in Mumbai city. According to the report, the average cost of construction for a luxury residential apartment in a high-rise building in Mumbai is Rs5,625 per square feet. The cost of construction in Mumbai is on average 10% higher than all other cities, across asset classes. The cost of construction in Delhi and Pune, would be Rs4,950 per square feet and Rs4,905 per square feet respectively.