AFRICA PROPERTY & CONSTRUCTION COST GUIDE

Transcription

AFRICAPROPERTY &CONSTRUCTIONCOST GUIDE19‘20‘

AECOM AFRICA PROPERTY &CONSTRUCTION COST GUIDE 2019/2030th EDITION 2019/20ISBN 978-0-6398024-0-4 AECOM SA (Pty) Limited.All rights reserved.

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Imagine it. Delivered.It’s one thing to imagine a better world.It’s another to deliver it.AECOM was built to do just that. With a deep and experiencedglobal team, we design and deliver infrastructure and servicesthat unlock opportunities for clients and communities andprotect our environment and improve people’s lives.From urban centres to remote villages, our work istransformative. We make a positive and lasting impact byapplying our global reach, connected expertise and deliveryexcellence to solve complex, evolving challenges.The difference that we help our clients make is felt in everyregion of the world. Clean water for developing communities,iconic skyscrapers that swell a nation’s pride, power and securityto fuel economic prosperity, transportation that brings peopletogether and thoughtful planning that sustains cities and naturalresources.Our clients face tough, interrelated challenges that can only besolved by a company like ours - one with deep roots, diverseperspectives and an innovative approach. One with the people,technology and vision to deliver what others can only imagine.We are AECOM. Imagine it. Delivered.

ContentsMessage from the Director, Cost Management AfricaSection 01Africa has RisenImproving LivesGlobal UniteBuilding Information ModellingSustainabilityResearch SupportMobile App Enabled Candidacy Support and Mentoring ProgrammeSection 02Our ServicesQuantity Surveying/Cost ManagementEngineering Cost ManagementBuilding Services Cost ManagementSection 03AECOM in South AfricaBroad-Based Black Economic EmpowermentSection 04South African Cost DataKey Factors Influencing Building Cost RatesApproximate Inclusive Building Cost RatesSection 05Global Sentiment and Building CostsAfrica Outlook 2018Africa in FiguresAfrica Building CostsGlobal Building CostsSection 06International Prestigious Office Rental ComparisonSection 07Building Cost EscalationsSection 08Method for Measuring Rentable AreasSection 09Return on InvestmentResidual Land ValueSection 10Directory of Offices in AfricaSection 11Bureau for Economic 1546267717374

Message fromDean NarainsamyDirector - PCC, AfricaWelcome to our Africa Property & Construction Cost Guide2019/20. As a company committed to building a better world,we’re always looking to improve and strengthen how wedo things from our delivery of projects to the research weconduct and conversations we share with colleagues, clientsand organisations. Our goal is to unlock the transformationalchange and innovation required to move the industry forward.From a Cost Management point of view, we continue todevelop and enhance our 5D BIM capabilities. With accessto industry leading software already in our toolkit, our focusover the last year has been one of collaborating with thevarious design disciplines at AECOM. Through this, we havebeen able to further our understanding of the requirementsof each discipline, and in turn, we are able to advise thedesign teams on the requirements to achieve a 5D-friendlydesign environment. This collaboration has been enhancedby our global reach, with our teams sharing knowledge anddeveloping our capabilities alongside our colleagues in theUS, UK, and the Middle East. Our commitment to innovativecollaboration has already resulted in practical solutions tosome of the challenges of moving into a digital world andhas allowed our teams to focus on providing a fuller serviceoffering for our clients.We are proud to report that we have maintained our Level 1B-BBEE Scorecard in terms of the Department of Trade andIndustry’s Revised Codes; a reaffirmation of our commitmentto contribute to a better South Africa. AECOM fully embracesdiversity and inclusion and sees this as a fundamentalingredient in support of the National Transformation Agenda.I am happy to report that we have made key appointmentsin our Commercial, Oil & Gas and East Africa business whichsupport the creation of a diverse workforce.AECOM6

Corporate Social Responsibility (CSR) is an area that wehold dearly to our hearts with various members of our teamsinvolved in charitable giving and with key social projectson a pro-bono basis. The health and safety of our staff andcommitment to delivering a quality service to our clientsremain a cornerstone of our business ethos.In late 2018, our Africa operations merged with those ofthe Middle East, a move that has been well received by ouremployees and clients alike. Pooling our resources over abroader region is allowing us to bring the best of AECOM toour clients and accelerate growth in our key markets. Weremain invested in Africa and are expanding our reach andlocal knowledge that we have gained over the years witha measured and focused approach aimed at developingopportunities throughout the continent in all sectors.I would also like to take the opportunity to include a briefintroduction to the Bureau for Economic Research (BER) at theStellenbosch University whom we deem as a strategic partner,in our yearly publication. Their respected Building CostReports provide credibility to our cost escalation forecasting.To conclude I would like to convey the message that whilstour business has evolved over the years, we continue to offerservices that influence the key drivers of value, cost and timein all our clients’ projects, a commitment that we value as wemove into the future.Best Regards,AECOM7

01SectionAfrica has RisenOur operations in Africaboast around 800 people,predominantly in South Africa.However, we have a growingnumber of permanent offices inkey African countries.We offer services to clientsacross the continent and maintaina project presence in morethan 40 African countries.With top- level professionalsin multiple strategic locations,we understand Africa’s specificinfrastructure needs, as well as itschallenges inherent in working onour wonderfully diverse, vibrantand complex continent.Our multidisciplinary teamsof award-winning engineers,planners, architects,environmental specialists,scientists, consultants, quantitysurveyors (cost managers) andproject and programme managersare committed to deliveringprojects that improve the qualityof life for Africa’s communities.AECOM8

Improving LivesAECOM is committed to the principles of good governance andcorporate citizenship. As an industry leader with a range of builtenvironment professionals, we strongly believe in investing ourresources to improve the quality of life for all.Our corporate social investment approach includes programmesundertaken to uplift communities in general and those that havea strong developmental and educational approach.Our strategy is aimed at facilitating the empowerment of talentedindividuals within a variety of interventions through universityand into the workplace. We believe that in providing theseopportunities to the identified individuals, they will realise theirpotential and be able to successfully enter the built environmentprofession.In 2017, AECOM established the AECOM Educational Trust withthe objective of providing bursaries to young, black women tofurther their tertiary education in the built environment field.Bridging the skills divideDisabled Learnership ProgrammeAECOM’s Learning and Development department, in partnershipwith Enigma Skills College, launched its second 12-monthDisabled Learnership Programme in 2018. Learnerships areintended to address the gap between education, trainingprovision and the needs of the labour market. To dateAECOM has sponsored 59 disabled learners on this workbased approach to learning that will culminate in a BusinessAdministration NQF level 2 and 3 qualifications.AECOM’s Bursary ProgrammeAs part of our commitment to improve skills, experience andexcellence in the built environment, AECOM offers bursarieseach year to aid full-time employees and meritorious studentsthat are studying towards the main fields of our core business.AECOM9

Global UniteWhat is Global Unite?Historically, cost data has existed in many different forms rangingfrom cost estimates to reports, spreadsheets etc.The Global Unite system was designed and developed to allowus to capture and benchmark this cost data in a central location.Unique power in themarket that cannotbe replicated.globalUniteCentres on a tool thatgathers the wealth ofpreviously untappeddata. Captures data atsource from estimatingand CAD systems.Database of elementalcost data, projectinformation and keybenchmark ratios.Invaluable bank ofknowledge that wecan bring to newprojects.What information can Global Unite hold?AECOM10

Where does Global Unite data come from?Everywhere! Global Unite allows the capture of data from allof the AECOM key geographies into one central database.How is Global Unite data presented?The system has a number of output/reporting options rangingfrom a tablet-based app, GUIDE (online web-based access)to inbuilt reports, charts and graphs, MS Excel and access viaAnalysis Services or other data analyses tools.AECOM11

Building Information ModellingBIM DefinedBuilding Information Modelling (BIM) is used to describe theprocess of designing and managing a building (or other designasset) in collaboration with the entire team, throughout theasset’s life-cycle, by using the same system or model ascompared to using separate sets of conventional drawings andinformation sets. BIM software is used to plan, design, construct,operate and maintain diverse physical infrastructures.Whether designing or constructing bridges and roads, officetowers and apartment blocks, pipelines, factories or schools, aninformation model or a database can be created that containsinformation about what will be built, how it will be built andhow it will perform. Enabled by technology, we can create asynchronised, collaborative, digital representation of assets tovirtually construct and test a project before we do so in reality.A BIM model usually includes the 3D shape of the objects, butcan also include things such as their cost, installation dateor operating parameters. We can attach practically infiniteadditional data to any object or category of objects in a BIMdatabase, and use that data to manage information flow acrossmultiple life-cycle phases and between multiple parties.By creating a single source of project information and by makingthis available across the design, construction and operationteams, we increase our accuracy and efficiency, and can realisesignificant savings on the life-cycle cost of operating an asset.Benefits of BIM——————————Improved visualisation.Improved coordination and collaboration.Improved conflict detection and risk mitigation.Improved productivity due to easy retrieval of information.Embedding and linking vital information for tenderingscheduling and estimating.—— Reduced rework costs and improved design efficiency.—— Improved access to maintenance information over abuilding’s life-cycle.——AECOM12

The 5D BIM processFor the Cost Management team, our focus is on 5D BIM, whichrefers to the linking of cost information to a 3D model. Theletter D in connection with BIM relates to the type of informationassociated with the model. It refers to other dimensions, suchas time (4D) or cost (5D) that is linked to a model. 2D and 3Dessentially refer to CAD 2D plans and 3D Model, while 5D BIMentails the intelligent linking of individual 3D CAD components tocost-related information.Understanding the processMoving over to the 5D BIM process is an enhancement toour current systems and the implementation thereof will offerseveral benefits. The process aims to automate the measuring,estimating and bill production stages. The value lies in the factthat it will enable Cost Managers to be more proactive and torather spend time on cost engineering and management ascompared to measurement and cost reporting only.In brief, shifting our focus towards the 5D BIM process requiresthe following:—— Cost Manager contribution and buy-in to the developmentof the BIM execution plan—— Involvement with the design team prior to the start ofdesign work to communicate our cost extraction designrequirements—— The application of a cost database as a parameter to theobjects contained in the 3D model—— Base our measures primarily on 3D design information—— Creating a unified link between the design information, ourmeasures and our costs—— Adoption of automated estimating, bill production andcost management tools.AECOM13

Possible benefits of BIM from a cost managementperspective—— Fast, reliable and accurate quantity take-off and costestimation.—— Auto computation of calculations, hence reducedcalculation mistakes.—— Categorised cost reporting and estimation via the use ofzones/locations.—— Improved visualisation of the elements for measurementand costing purposes.—— Easy project handover between quantity surveyors.—— Enhanced communication and collaboration amongst theprofessional and project team.—— Improved cost database management.—— Enables a more proactive outlook from a quantitysurveying perspective regarding cost management,contract management and cost engineering.AECOM14

SustainabilityAECOM is a company with a vision to build a better world.Our projects transform communities, improve lives andpower growth by designing, building, financing and operatinginfrastructure assets globally.From our on-site practices to initiatives in our offices, we arecommitted to implementing sustainability in everything we do.Our purpose is to enhance and sustain the world’s built, naturaland social environments. Our key goals at the heart of ourcommitment are:—— Embedding sustainability into all aspects of our workwith our clients.—— Building our capability to provide sustainable solutionsfor our clients in creative and innovative ways.—— Conducting our business in a way that is consistent withsustainability principles.AECOM15

By embracing sustainability, we aim to produce sustainableoutcomes across every aspect of our work including planning,design, development, production, delivery and review.Sustainability is also at the core of how we manage our companyglobally. We take our responsibilities seriously, and continueto deliver improvements in our environmental performanceacross key performance indicators including greenhouse gasemissions, water, waste, energy and preparedness for theimpacts of climate change.For example, AECOM was a “Silver” founding member of theGreen Building Council of South Africa (GBCSA), demonstratingour commitment to building sustainably. We maintain thismembership each year. We have also assisted the GBCSA withits technical working groups to launch the Green Star SouthAfrica Office rating tool in 2008, and the Green Star South AfricaRetail Centre rating tool in 2010.Employees from across our South African business havecompleted the Green Star South Africa accredited professionalcourse and are available to help clients and colleagues toachieve their environmental responsibilities, as well as theirfinancial objectives in terms of infrastructure and buildingdevelopment.Green building ratings currently undertaken by our team ofsustainability consultants include: Green Star Office, Green StarInteriors, Green Star Existing Building Performance, LEED Designand Construction and LEED Interior ratings.AECOM16

Research SupportResearch is a key part of AECOM’s aspirations to embracecomplex challenges and deliver transformational outcomes.Through our research and knowledge creation activities, we aimto stimulate beneficial cultural and business changes, resolveindustry-specific problems, support our knowledge databaseand deliver cost-effective, high-quality and relevant services.We also undertake contract research on assignment for clients.Globally we have a tradition of supporting researchcollaborations, and in South Africa we are currently pursuing awide range of research studies with local academic and researchinstitutions, professional bodies and the government.Current research nationally and internationally centres around:—— Local, regional and international influences onconstruction costs and prices.—— BIM cost models.—— Sustainability and green buildings — drivers of greendesign, construction and operations within differentbuilding types.—— Improving infrastructure project delivery in South Africa.—— Tall, large and complex buildings — efficiencies inconstruction and life-cycle costing.—— The triple bottom line in construction and propertydevelopment.—— The soft landings process for buildings.We have ongoing collaboration with our international officeswith specific regard to global infrastructure sentiment surveys,sector-specific research and developing global project-costdatabases.Finally, we aim to work closely with industry on continuingeducational workshops and in developing relevant industryreports and publications.AECOM17

Mobile App enabled AECOM Candidacy Supportand Mentoring ProgrammeThe AECOM Africa Candidacy Support and MentoringProgramme has been uniquely designed for AECOM Africa byMentoring 4 Success (M4S) to cater for the specific professionalregistration requirements of the whole built environment(encompassing six professional bodies) as well as two additionalprofessional bodies relevant to the AECOM End Markets.This programme has also been designed to comply with thestringent requirements of the DTI Skills Matrix “Category C”programme requirements and has received approval from twoof the most respected SANAS accredited B-BBEE verificationagencies in South Africa — Empowerlogic and PlatinumVerifications.The programme design includes six categories for graduates andapplicants:—— “Bridging” applicants who need to increase their minimumacademic requirements.—— New graduates — prior to their candidacy application.—— Recently registered or more experienced candidates.—— Mature candidates (work experience exceeds the normaltimeframe to registration).—— Internationally qualified and experienced candidates.—— RPL candidates.The programme has been designed to incorporate a carefulbalance between the “process” of professional registration andthe “path” to professional development — thus acceleratingthe development of confident, capable and competent youngprofessionals within AECOM.The programme is supported by the unique M4S ProfessionalRegistration Mentoring Handbook which has been aligned inconjunction with each of the professional bodies to demystify theroad to registration and answer the many consistent questionsthat young graduates and candidates have.AECOM18

M4S provides a completely outsourced professional registrationsupport mentoring programme methodology, as well as thefull programme management, facilitation and administrationresources required to support such a complex and multiregional/multi-office project of this nature, with over 100participants. This includes managing, monitoring and maintainingall the compliance and administration requirements for B-BBEE“Category C” and CETA verification.The programme is further enabled via the unique M4S MobileKnowledge Mentoring Apps and Analytic Dashboards, whichenable constant collaboration between candidates and theirmentors as well as their colleague candidates on commonknowledge themes related to their jobs as well as professionalregistration. These unique technology platforms allow for M4Sto gather, monitor and report on the rich engagement analyticsso critical to validating effective impact and acceleratedprofessional development.AECOM19

02SectionOur ServicesQuantity Surveying/CostManagementAECOM provides comprehensive costmanagement services from projectinitiation to completion through all sixstages of the project cycle as identifiedby The South African Council for theQuantity Surveying Profession, Tariff ofProfessional Fees, Quantity SurveyingProfession Act 2000 (Act 49 of 2000),which is summarised as follows:Stage 1—— Assisting in developing a clearproject brief.—— Advising on the procurementpolicy for the project.—— Advising on other professionalconsultants and servicesrequired.—— Advising on economic factorsaffecting the project.—— Advising on appropriate financialdesign criteria.—— Providing necessary informationwithin the agreed scope of theproject to the other professionalconsultants.Stage 2—— Agreeing on the documentationprogramme with the principalconsultant and other professionalconsultants.—— Reviewing and evaluating designconcepts and advising on viabilityin conjunction with the otherprofessional consultants.AECOM20

—— Preparing preliminary and elemental or equivalentestimates of construction cost.—— Assisting the client in preparing a financial viability report.—— Auditing space allocation against the initial brief.—— Providing services for which the following deliverables areapplicable: Preliminary estimates of construction cost Elemental or equivalent estimates ofconstruction cost Space allocation audit for the project.Stage 3—— Reviewing the documentation programme with theprincipal consultant and other professional consultants.—— Reviewing and evaluating design and outlinespecifications, as well as exercising cost control inconjunction with the other professional consultants—— Preparing detailed estimates of construction cost.—— Assisting the client in reviewing the financial viabilityreport.—— Commenting on space and accommodation allowancesand preparing an area schedule.—— Providing services for which the following deliverables areapplicable:—— Detailed estimates of construction cost—— Area schedule.Stage 4—— Assisting the principal consultant in the formulation of theprocurement strategy for contractors, sub-contractorsand suppliers.—— Reviewing working drawings for compliance with theapproved budget of construction cost and/or financialviability.—— Preparing documentation for both principal and subcontract procurement.—— Assisting the principal consultant with calling of tendersand/or negotiation of prices.AECOM21

—— Assisting with financial evaluation of tenders.—— Assisting with preparation of contract documentation forsignature.—— Providing services for which the following deliverables areapplicable: Budget of construction cost Tender documentation Financial evaluation of tenders Priced contract documentation.Stage 5—— Preparing schedules of predicted cash flow.—— Preparing proactive estimates for proposed variations forclient decision making.—— Adjudicating and resolving financial claims by contractors.—— Assisting in the resolution of contractual claims bycontractors.—— Establishing and maintaining a financial control system.—— Preparing valuations for payment certificates to be issuedby the principal agent.—— Preparing final accounts for the works on a progressivebasis.—— Providing services for which the following deliverables areapplicable: Schedules of predicted cash flow Estimates for proposed variations Financial control reports Valuations for payment certificates Progressive and draft final accounts.Stage 6—— Preparing valuations for payment certificates to be issuedby the principal agent.—— Concluding final accounts.—— Providing services for which the following deliverables areapplicable: Valuations for payment certificates Final accounts.AECOM22

Engineering Cost ManagementMining and engineering cost management operates as aspecialist service within AECOM. It comprises specialist skillsand applications that enhance the risk and value managementtechniques required by the mining, infrastructure, minerals,metallurgical and petrochemical sectors.Our mining and engineering cost management group includesdedicated independent teams specialising in, and responsiblefor, the estimation, procurement, cost management and contractadministration activities relating to the abovementioned sectors.The mining and engineering cost management team operatesthroughout Africa using infrastructure support from our otherlocal offices in all major centres in South Africa, Mozambiqueand Botswana. Our group employs professionally-qualifiedquantity surveyors, cost managers, cost engineers and contractadministrators.Mining, infrastructure, minerals, metallurgical and petrochemicalprojects are generally of a high monetary value. It thereforeis most beneficial to involve the mining and engineering costmanagement team at an early stage in the project cycle.Imposing robust financial discipline from a very early stageof a project will result in accurate and structured estimating,timely and cost-effective procurement, accurate and up-todate maintenance of costs to completion, including the costmanagement of design changes and the prompt close-out ofcontracts. The implementation of these principles of financialmanagement will thereby deliver maximum shareholder valueand it is in this area that the engineering cost management teamstrives to significantly influence project outcomes to benefit allstakeholders.Our mining and engineering cost management group providesa depth of experience, expertise and independence thatcontributes to and complements the client’s team. This is critical,particularly in the early stages of a project, when the opportunityto add value, as well as recognise and define cost, is established.Simultaneously, formalising project principles is equally criticalthroughout the project, with cost management continuingthrough to the post–contract period and final closeout.AECOM23

Building Services Cost ManagementThe importance of cost managementBuilding services such as electrical, air-conditioning, fireprotection and the various electronic installations are part ofevery building project, and usually comprise 25 per cent to40 per cent of the total construction cost, thus effective costmanagement of the building services is essential to ensurethe client’s budget is met.Independent cost management of building services ensurestransparency of costs and a dedicated service not linked tothe specific design consultant.ExpertiseOur building services cost management team draws uponits unique expertise to provide financial management andcontract administration of all building services including:—— Electrical installation.—— Heating, ventilating and air-conditioning (HVAC)installations.—— Fire protection systems.—— Fire detection and evacuation systems.—— Electronic systems such as access control,surveillance, and structured cabling.—— Lifts and escalators.Our track record stretches over 30 years, during which wehave cost-managed the full complement of building serviceson many major projects.AECOM24

Services providedWorking in close conjunction with the appointed mechanical,electrical and fire protection consultants, our building servicesteam provides a comprehensive service that covers all aspectsof procurement and cost management including:—— Cost planning at an early stage prior to detailed design.—— Cost studies to compare alternative materials anddesigns.—— Evaluating the design as it evolves to ensure compatibilitywith the approved cost plan.—— Procurement from tender documentation to adjudication.—— Cost management, monitoring and reporting.—— Valuation of work done during construction.—— Settling final costs with the contractor.AECOM25

03SectionAECOM in South AfricaBroad-Based Black EconomicEmpowerment (B-BBEE)Transformation is an important factorin South Africa’s democratic transitiontowards the vision of a non-racial, nonsexist, democratic and prosperous societyas summarised in the Freedom Charter.AECOM believes that to realise the visionof the Constitution, South Africa needstransformation that opens a path to inclusiveeconomic growth and development.As a responsible business and a leaderin the built environment industry, AECOMacknowledges that to be a good corporatecitizen we need to embrace fully theprinciples of transformation.We strive to advance on our status levelthrough a B-BBEE strategy that setscontinuous improvement targets on all theB-BBEE scorecard criteria to maintain aleading role in the built environment.For a second year in succession, AECOMhas achieved a Level 1 B-BBEE status level.AECOM’s most recent B-BBEE assessmentis indicated hereunder:B-BBEE Level Status:Level 1Procurement Recognition Level135%Black Ownership30% Black-OwnedBlack Women Ownership21.4% Black Women-OwnedScorecard Information: Ownership Management Control Skills Development Enterprise & Supplier Development Socio-Economic Development21.01 points16.2 points31.32 points18.77 points6 pointsTotal103.31 pointsEmpowering SupplierYESDesignated Group SupplierNOScorecardGeneric – Amended ConstructionSector Charter (1 December 2017)AECOM26

04SectionSouth African Cost DataKey Factors InfluencingBuilding Cost RatesInherent difficulties and pitfallsThis section highlights the inherentdifficulties and pitfalls that may occurwhen inclusive or single rates are usedto establish the estimated cost of aparticular building.Construction cost estimation iscomplex. Comprehensive exercisesbased on detailed and accurateinformation are required to achievereliable levels of comfort. For variousreasons, however, decisions are oftenbased on inclusive rate estimates,i.e. rate per square metres (m²) ofconstruction area or rate per unit innumber.The most widely used method of quickapproximate estimating to obtain anindication of the construction cost ofa building is by the rate/m²-on-planmethod. This is often also referred toas the “order of magnitude” methodof cost estimation. It certainly is bothquick and convenient, but it can be verymisleading if used indiscriminately andwithout taking care when calculating theconstruction area and selecting the rate.Cost comparisons of variou

Welcome to our Africa Property & Construction Cost Guide 2019/20. As a company committed to building a better world, we’re always looking to improve and strengthen how we do things from our delivery of projects to the research we conduct and conversat