Property & Construction Cost Guide 2017 Final - AECOM

Transcription

AFRICA PROPERTY& CONSTRUCTIONCOST GUIDE 2017Offering global expertise and tailored localsolutions in more than 150 countriesaecom.com@aecom

AFRICA PROPERTY & CONSTRUCTIONCOST GUIDE 201728th EDITION 2017ISBN 978-0-620-75735-5 AECOM SA (Pty) Limited.All rights reserved.

To learn more about how AECOM is delivering a better worldgo to: www.aecom.comGet our:Without Limits AppAlso follow us on:Twitter: @aecomFacebookLinkedInInstagram

ContentsMessage by AECOM Project Cost Consulting DirectorSection 01Built to Deliver a Better WorldOur Core ValuesSafety FirstQuality ExcellenceAfrica has RisenImproving LivesGlobal UniteBuilding Information ModellingSustainabilityResearch SupportSection 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 OutlookAfrica 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 454951535664697375

Message fromDean NarainsamyDirector – Project Cost Consulting Africa,Buildings Places, AfricaWith six months into the year, I would like to share a fewreflections of the progress we have made as a company.Following on from last year’s closing remarks, whichhighlighted adaptability and change management as criticalsuccess factors required to remain relevant in this market,we at AECOM have seen this sentiment resonate across ourbusiness.How so? As an industry, we are currently facing manychallenges impacting economic growth and infrastructuredevelopment. This includes limited funding, tightening ofcredit terms and a lack of investment, as well as shiftingdemographics and political instability, which have allculminated in delayed project start dates.However, with this in mind, we have also seen greatopportunities and a significant shift in our business towardsleveraging and integrating new technologies, being moreinnovative in terms of solutions to our clients, and sharingknowledge and resources across our increasingly globalisedmarkets.Investment in innovation is a trademark of being a globalbusiness, which, in turn, allows knowledge and systems tobe shared and transferred. As AECOM, we are taking thiseven further, working on the development of a global projectAECOM6

tool that will enable each of our geographies to benefit fromsharing global cost, programme, design and key projectenablers.Our passion and commitment to Africa remains. We continueto develop opportunities in the continent across all sectors,with both local and multinational clients. We aim to entrenchour role as a trusted advisor in Africa and help our clientsunlock uncharted territories with passion, integrity andrespect. The African continent remains a key enabler forsustainabilty and growth for the business sector.Further, our ability to retain, attract and recruit the best peopleremains a key focus for us. I am happy to announce thatour AECOM Graduate Development / Mentoring 4 SuccessProgramme was successfully launched earlier in the year.I have no doubt that this will go a long way in enhancing ourvision of becoming the employer of choice.To our clients - technical and operational excellence remainsour top priority. Our strategic and business plans are alignedto making our continent a better place. In the year ahead,we look forward to being of service to you in delivering yourprojects and turning your opportunities into a reality.Best Regards,Dean NarainsamyAECOM7

Section01Built to Deliver a Better World.It’s one thing to imagine a betterworld. It’s another to deliver it.AECOM was built to do just that. Witha deep and experienced global team,we design and deliver infrastructureand services that unlock opportunities for clients and communities andprotect our environment and improvepeople’s lives.From urban centres to remote villages,our work is transformative. We makea positive and lasting impact byapplying our global reach, connectedexpertise and delivery excellence tosolve complex, evolving challenges.The difference we help our clientsmake is felt in every region of theworld. Clean water for developingcommunities, iconic skyscrapersthat swell a nation’s pride, power andsecurity to fuel economic prosperity,transportation that brings peopletogether and thoughtful planning thatsustains cities and natural resources.Our clients face tough, interrelatedchallenges that can only be solved bya company like ours - one with deeproots, diverse perspectives and aninnovative approach. One with thepeople, technology and vision todeliver what others can only imagine.We are AECOM — built to deliver abetter world.AECOM8

Our Core ValuesAt AECOM, we are guided by six core values that we all share andthat underpin everything we do.SAFEGUARDWe operate ethically and with integrity, whileprioritising safety and security in all that we do.COLLABORATE We build diverse teams that connect expertiseto create innovative solutions.INSPIREWe develop and celebrate our people, andelevate the communities we touch.ANTICIPATEWe understand the complexity of our clients’challenges and help them see further.DELIVERWe grow our business through operationalexcellence and flawless execution.DREAMWe transcend the industry by reimagining whatis possible – and realising it.AECOM9

Safety FirstSafety, Health and Environment (SHE) is a prized component ofthe AECOM culture.Safeguarding our people, those we work with and anyoneaffected by our operations, as well as the environment andcommunities in which we work, is a business criticalresponsibility. It is one of our core values and central to our abilityto conduct business with integrity at all times.In order to achieve this, AECOM’s senior management teamleads the improvement process and continuously demonstratessupport and commitment.Our policies, procedures and processes which form part of ourSHE Management System are fully aligned to the internationalstandards for both environmental management - ISO 14001,and safety and health management - BS OHSAS 18001.AECOM10

Quality ExcellenceAECOM is a global community of professionals – differentin disciplines, backgrounds and perspectives – united by acommon goal of solving our clients’ most complex challenges.To achieve this, we have an Integrated Management System(IMS) that provides a consistent documented and auditableplatform for operations with the capacity to manage risk andchange.We are committed to promoting a culture of continualimprovement in the management of our business through:—— Promoting a workplace in which everyone is encouragedand expected to do the right thing.—— Preventing illness of and injury to our employees who maybe affected by our activities.—— Compliance with all legal obligations and otherrequirements related to our business activities.—— Encouraging a proactive culture of safety, security andquality to keep our people safe, secure and consistentlyproviding quality deliverables for enhanced clientsatisfaction.—— Providing a secure and resilient workplace for all of ouremployees and to meeting our obligations, if any, withrespect to the protection of others affected by ouractivities.—— Continually improving all areas of our business whilestriving to improve the effectiveness of the IMS.—— Providing a Delivery Excellence framework for establishingand reviewing appropriate business objectives andtargets.—— Supporting the professional development of ouremployees.—— Providing services in a manner that meets clientrequirements and enhances client satisfaction by usingour expertise and experience to deliver a quality product.—— Implementing effective pollution prevention and wastereduction programmes.Our IMS is certified to ISO 9001: 2008.AECOM11

Africa has RisenOur operations in Africa boast more than 800 people,predominantly in South Africa. However, we have a growingnumber of permanent offices in key African countries.We offer services to clients across the continent and maintaina project presence in more than 40 African countries. With toplevel professionals in multiple strategic locations, we understandAfrica’s specific infrastructure needs, as well as its challengesinherent in working on our wonderfully diverse, vibrant andcomplex continent.Our multidisciplinary teams of award-winning engineers,planners, architects, environmental specialists, scientists,consultants, quantity surveyors (cost managers) and project andprogramme managers are committed to delivering projects thatimprove the quality of life for African communities.AECOM12

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 into improving the quality of life for all.AECOM works in harmony with the communities fromareas in which it operates. As a good corporate citizen, ourcorporate social investment (CSI) initiatives focus on upliftingdisadvantaged communities.Accepting that sustainable development begins with satisfyingbasic human needs, we support a range of charitable causessuch as shelters for the homeless; homes for the disabled,orphaned and elderly citizens.Growing the pipeline of engineers and technicians for askills-scarce AfricaMany people in Africa face development challenges, such as alack of water and energy security; insufficient and inadequatehousing; and a lack of safe and reliable modes of transportation.Solutions to these challenges call for both financial resourcesand sufficient engineering expertise to plan, design, programmeand build the required infrastructure.As part of this, we have set up the AECOM SA Bursary Scheme,where we annually award merit bursaries to fund full-timeundergraduate students in engineering-related studies ataccredited universities.AECOM13

Global UniteGlobal Unite is AECOM’s international benchmarking and projectperformance indicator database. Large amounts of data ofmany different formats ranging from estimates, bills of quantitiesand reports are captured in a central server and analysed on aglobal scale. It gives us the ability to provide evidence-based,early stage construction cost and design advice based onbenchmarks of similar projects – via our interactive GUIDE(Global Unite Indicative Design Estimator) tool.Collaboration amongst various software platforms allowsGUIDE to draw on project information in the Global Unitedata warehouse which, given the size, scale and reach of theinformation library, means we are able to predict early stageconstruction costs in almost all regions of the world.We can now instantly analyse parameters that define howeffective or efficient an asset is (or is not) against local or globalstandards for all asset types. This marking against specific sector and asset typesComparing cost by element and sub-elementsParametric modellingConducting on-site project analysis in real-timeBenchmark ratiosVarious filtering drivers such as area, functional units andother metricsInformation obtained from GUIDE can be presented in variousformats and reports can be personalised to suit our clients’requirements.Each region in AECOM’s Global Unite network has subtlevariations that reflect the elemental breakdown structure toensure the capture of cost and quantity data is appropriatefor local projects, as well as being comparable in terms ofinternational benchmarking.Although construction cost information is specific to a particularlocation, design benchmarks can be extracted and analysed forthe benefit of driving efficiency across different project typesglobally.AECOM14

For clients who have large capital programmes or who undertakenumerous construction projects, AECOM can provide GlobalUnite as a service whereby we can create a tailored solutionthat will capture and manage their data and configure specificbenchmarks and reports that help inform and add value to theirdecision-making processes.AECOM is looking at methods of collaborating BuildingInformation Modelling (BIM) and GUIDE to provide smart,intelligent information modelling which results in time and designefficiencies.GUIDE is available through various electronic platforms includingmobile devices. It is also commercially available to clientswanting to benchmark their own projects and can be set up tosuit individual needs.Centres on a tool thatgathers the wealth ofpreviously untapped data.Captures data at sourcefrom estimating and CADsystems.Unique power in themarket that cannot bereplicated.AECOMglobalUniteDatabase of elementalcost data, projectinformation and keybenchmark ratios.Invaluable bank ofknowledge that wecanbring to newprojects.15

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 in order to plan, design,construct, operate and maintain diverse physical infrastructures.Whether we are designing or constructing bridges, towers,roads, pipelines, factories or schools, an information model or adatabase, can be created that contains information about whatwill be built, how it will be built and how it will perform. Enabled bytechnology, we can create a synchronised, collaborative, digitalrepresentation of assets to virtually construct and test a projectbefore 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 date,or 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 truth and making projectinformation available across the design, construction andoperation teams, we increase our accuracy and efficiency, andcan realise significant savings on the life-cycle cost of operationfor an asset.AECOM16

Benefits of the BIM Process——————————Improved visualisationImproved coordination and collaborationImproved conflict detection and risk mitigationImproved productivity due to easy retrieval of informationEmbedding and linking vital information for tenderingscheduling and estimating—— Reduced costs and improved efficiency—— Enhanced performance and increased speed of delivery—— Easy maintenance of building life-cycleThe BIM Process5D BIMFor the Cost Management team, our focus is on 5D BIM, whichrefers to the linking of cost information to a 3D model. The letterD in connection with BIM relates to the information associatedwith the model. It refers to other dimensions, such as time (4D)or cost (5D) that is linked to a model. 2D and 3D essentially referto 2D and 3D CAD designs. 5D BIM entails the intelligent linkingof individual 3D CAD components with schedule (time - 4D BIM)constraints and then with cost-related information.Understanding the ProcessMoving over to the 5D BIM process is an enhancement toour current systems and the implementation thereof willoffer a number of benefits. The system aims to automate themeasuring, estimating and bill production stages. The value liesin the fact that it will enable us to be more proactive and to ratherspend time on cost engineering and management as comparedto measurement and cost reporting only.In brief, shifting our focus towards the 5D BIM process requiresthe following:—— Involvement with design team prior to the start ofdesign work to communicate our cost extraction designrequirements—— Base our measures on both 2D and 3D design information—— Create a unified link between the design information, ourmeasures and our costs—— Adopt automated estimating, bill production and costmanagement toolsAECOM17

Possible benefits of BIM from a cost managementperspective—— Fast, reliable and accurate quantity take-off andcost estimation—— Auto computation of calculations, hence reducedcalculation mistakes—— Categorised cost reporting and estimation via theuse of zones/locations—— Improved visualisation of the elements formeasurement and costing purposes—— Easy project handover between quantity surveyors—— Enhanced communication and collaborationamongst team—— Improved cost database management—— Facilitated change management—— Enables a more proactive outlook from a quantitysurveying perspective with regard to costmanagement, contract management and costengineeringAECOM18

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 work withour clients—— Building our capability to provide sustainable solutions forour clients in creative and innovative ways—— Conducting our business in a way that is consistent withsustainability principlesBy embracing sustainability, we aim to produce sustainableoutcomes across every aspect of our work including planning,design, development, production, delivery and review.AECOM19

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 on itstechnical working groups to launch the Green Star South AfricaOffice rating tool in 2008 and the Green Star South Africa RetailCentre 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.AECOM20

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. Wealso 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 andresearch institutions, 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 buildingsWe also have an on-going collaboration with our internationaloffices with specific regard to global infrastructure sentimentsurveys, sector-specific research and developing global projectcost databases.Finally, we aim to work closer with industry on continuingeducational workshops and in developing relevant industryreports and publications.AECOM21

Section02Our ServicesQuantity Surveying/CostManagementAECOM provides comprehensivecost-management services fromproject initiation to completionthrough all six stages of the projectcycle as identified by The SouthAfrican Council for the QuantitySurveying Profession, Tariff ofProfessional Fees, QuantitySurveying Profession Act 2000 (Act49 of 2000), which is summarised asfollows: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 appropriatefinancial design criteria—— Providing necessaryinformation within the agreedscope of the project to theother professional consultantsStage 2—— Agreeing on the documentationprogramme with the principalconsultant and otherprofessional consultantsAECOM—— Reviewing and evaluatingdesign concepts and advisingon viability in conjunctionwith the other professionalconsultants22

—— 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 projectStage 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 allowances,and preparing an area schedule—— Providing services for which the following deliverables areapplicable: Detailed estimates of construction cost Area scheduleStage 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—— Assisting with financial evaluation of tenders—— Assisting with preparation of contract documentation forsignatureAECOM23

—— Providing services for which the following deliverables areapplicable: Budget of construction cost Tender documentation Financial evaluation of tenders Priced contract documentationStage 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 accountsStage 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 accountsAECOM24

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 petro-chemical 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, contractadministrators, construction programmers and building surveyors.Mining, infrastructure, minerals, metallurgical and petro-chemicalprojects 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 which willcontribute to and complement 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.AECOM25

Building Services Cost ManagementEvery client wants rigorous control of overall building costs andto ensure that every Rand spent is optimised. Building servicessuch as electrical, air-conditioning, fire protection and thevarious electronic installations are part of every building project,and usually comprise 25 to 40 per cent of the total constructioncost. It therefore follows that effective cost management of thebuilding services is just as essential as for any other part of theconstruction costs.Our building services cost management team draws upon itsunique expertise to provide financial management and contractadministration of building services. These services include:—— Electrical installation—— Heating, ventilating and air-conditioning ��———————Fire protection systemsFire detection and evacuation systemsAccess controlClosed circuit television (CCTV)Lifts, escalators and travellatorsCommunication systemsBuilding management systemsSecurity systemsData systemsWe have offered cost advice and quantity surveying servicesfor all building services for many years, with a record thatincludes many major projects. Meticulous procurement and costmanagement practices are part of our standard methodology.Independent cost management ensures transparency ofcosts and a dedicated service not linked to the specific designconsultant.AECOM26

Working in close conjunction with the appointed mechanical,electrical and fire protection consultants, our building servicesteam provides a comprehensive service encompassing thefollowing:—— Cost planning at an early stage prior to detailed design—— Cost studies to compare alternative materials anddesigns in terms of capital, operating, maintenance anddepreciation costs—— Monitoring and evaluating design as it evolves to ensurecompatibility with the approved cost plan—— Advising on contractual arrangements and preparingtender procurement documents—— Adjudicating tenders in conjunction with the low predictionsCost management and reportingValuation of work done during constructionDetermining final costsSettling final costs with the contractor and subcontractorsAECOM27

Section03AECOM in South AfricaBroad-Based Black EconomicEmpowerment (B-BBEE)AECOM recognises and fully endorsesB-BBEE as an integral part of ourcontribution to a better South Africa.As a responsible business and a leaderin the built environment industry,AECOM acknowledges that to be a goodcorporate citizen we need to embracefully the principles of transformation.We strive to advance on our status levelthrough a B-BBEE strategy that setscontinuous improvement targets on allthe B-BBEE scorecard criteria in orderto maintain a leading role in the builtenvironment and our positive impacton society.AECOM’s most recent B-BBEEassessment is indicated hereunder:B-BBEE Level Status:Level 3Procurement Recognition Level110%Black Woman Ownership10% Black Woman-OwnedBlack Ownership30% Black-OwnedScorecard Information: Ownership Management Control Skills Development Enterprise & Supplier Development Socio-Economic DevelopmentEmpowering SupplierDesignated Group SupplierScorecardAECOMTotal25 points12.78 points16.39 points33.80 points5 points92.97 pointsYESNOGeneric – B-BBEE Codes ofGood Practic

Quantity Surveying/Cost Management 22 Engineering Cost Management 25 Building Services Cost Management 26 . International Prestigious Office Rental Comparison 53 Section 07 Building Cost Escalations 56 Section 08 . Collaboration amongst various software platforms allows GUIDE to draw on project information in the Global Unite .