UAE | CONSTRUCTION COSTS UPDATE
MAY 2018
Abu Dhabi and Dubai
Construction Cost Benchmarking 2018 (1st Quarter)
Cost Range
Item Building Type
(AED/m2)
Residential
1 Villa - Medium Specification 3,490 - 4,277
2 Villa - High Specification 5,377 - 6,390
3 Apartment Low to Medium Rise - Medium Specification 3,275 - 4,288
4 Apartment High Rise - High Specification 5,688 - 6,440
Commercial (Shell and Core only)
5 Office Low to Medium Rise - Medium Specification 3,487 - 4,327
6 Office High Rise - Medium Specification 3,997 - 5,322
Industrial
7 Medium Duty Industrial 1,770 - 2,949
8 Medium to Heavy Duty Industrial 2,772 - 5,526
Hotels (Including FF&E)
9 Three Star 5,400 - 6,744
10 Four Star 7,758 - 9,296
11 Five Star 9,271 - 11,977
Retail (Shell & core with public area finished)
12 District Mall 3,881 - 5,319
Carparking
13 Podium 2,041 - 2,761
14 Basement 2,635 - 3,129
• Professional fees, land acquisition costs and financing costs are excluded from the above
• All hotel rates are inclusive of Furniture, Fittings and Equipment (FF&E)
• Costs/m2 are based on GIA as per the RICS code of measuring practice 6th edition
Source: Colliers International
Colliers International | UAE Construction Cost – MAY 2018
Construction Cost Movement
Materials
The industry has witnessed a notable upward movement in construction materials. There are many factors for this
ascending trend, which include increased cost of production for locally manufactured materials, a recent drive by
Chinese authorities to close down factories that do not conform to pollution control regulations, increased cost of
materials imported from regions experiencing a growth in construction such as Europe, and world pricing for the likes of
steel.
For the average building, this material cost increase when comparing Q1 2017 to Q1 2018, is an add-on of 3.1%.
However, when one takes into account all average costs between the period, and a continuous competitive market
putting pressure on contractor margins, the actual overall increase to the cost of construction between Q1 2017 & Q1
2018 ranges from 1.8 to 2.3%, depending on building type, design and specification.
Below is a representation of the material percentage movement from Q1 2017 to Q1 2018.
Timber Electrical Cables Glass PVC & UPVC Pipe
6-12% 13-16% 4% 4-6%
Sanitary Ware Transport Rebar Diesel
3-5% 9% 30% 22%
Inflation Outlook
In April of this year the World Bank has predicted that copper and crude oil pricing will remain relatively flat for the
period between 2018 & 2019, with iron ore and aluminum prices decreasing by 6.3% & 3.4%, respectively. With no
major material inflation predicted, combined with another period of expected strong competition between contractors, it
is forecasted that construction cost inflation will not exceed 1.8% for the next twelve months.
Colliers International | UAE Construction Cost – MAY 2018
Colliers International Construction
Consultancy
As specialist construction consultants we provide
project, cost and construction management services.
Our success is based on two simple principles;
i. Construction advisory that is tailored to each
client, based on the knowledge of our staff whom
first and foremost are construction people.
ii. Our services ensure risks are eliminated, quality
of design & construction is delivered, optimum
program timelines are achieved, all at the lowest
price possible.
Our Project Management & Cost
Consultancy Services include:
Project Management
> Development Management
> Program Management
> Project Management
> Client Representation
> Construction Supervision
> Tenant Coordination
> Building Surveying
Quantity Surveying
> Cost Modelling & Benchmarking
> Cost Planning/Management/Control
> Risk Appraisal
> Life Cycle Costing
> Value Engineering
> Procurement Strategy & Advise
> Tendering & Evaluation
> Tender Documentation & Bills of Quantities
> Contract Documentation & Administration
> Cash Flow Forecasting
Project Monitoring
> Bank/Financial Institution Representation
> Early Warning Advice
> Project Cost Analysis and Advice
> Program Monitoring
> Stage Payment Recommendations
> Quality & Specification Inspections
Colliers International | UAE Construction Cost – MAY 2018
Colliers International
Operating from
69 countries on For further information,
please contact:
Bob Flanagan
Managing Director
6 continents Project Management & Cost Consultancy Services
[Link]@[Link]
Colliers International
Abu Dhabi| United Arab Emirates
+971 2 619 2460
Dubai | United Arab Emirates
$2.7 +971 4 453 7400
billion in
annual revenue [Link]
2
billion square feet
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professionals
and staff
Copyright © 2018 Colliers International.
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been
made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged
to consult their professional advisors prior to acting on any of the material contained in this report.
Colliers International | UAE Construction Cost – MAY 2018
