April 2010

Cost Challenges of Tall Buildings

Landmark Attractions
Amidst a collapsing property market, Dubai The level of complexity in such construction
officially opened its 160-storey, 828-metre tall means that any variations and changes during
Burj Khalifa the worlds tallest man-made the course of construction will lead to both
structure - four days into the New Year. substantial increases in costs as well as a longer
construction period.
The Burj Khalifa highlights the attractions of tall
buildings especially as iconic landmarks. In the case of a tall building, the greater the In this issue of Dynamics, coinciding with the
height, the less would be its overall cost recent opening of the worlds tallest building the
In many ways, tall buildings provide excellent effectiveness and value efficiency due to a Burj Khalifa in Dubai, we take a look at the key
showcases in design, construction methods and variety of reasons. (Refer Chart 1) cost drivers etc. in tall buildings, and the
technologies, specialist techniques and expertise; importance of good cost and procurement
and are seen as firm statements of achievement. Chart 1 management from project inception. Also
included is a showcase of DLSs tall buildings
A tall building also provides its occupants with project experience around the region.
prestigious status: that of a landmark and highly Building Efficiency
Construction Cost/m2
News from Asia

Construction Cost/m2 We also include an introduction to Project-

visible address.

Building Efficiency
Monitoring - a relatively new service line provided
With land especially in cities becoming by DLS - but one for which we envisage signifi
increasingly scarce, constructing upwards seems cant scope for expansion. We feature a case
the most feasible and economical solution for study from one of our recent projects in Tianjin,
developments to increase occupancy density. China.

Thus, cost challenges of tall buildings construc- Building Height We also have regular round-up of construction
tion are often offset by the prospect of higher Impact of Different Building Height on inflation and activity around the region, with
revenue. Construction Cost and Building Efficiency. reports from our network of 35 Asian offices.

Though there is no official definition of what

constitutes a tall building, the benchmark may Structural Considerations
have moved considerably with super tall Structural cost generally accounts for 20% to Asian Construction Outlook 2009 - 2010
buildings now going beyond 100-storeys, or 25% of the overall construction cost of a tall
approximately the half-kilometer mark. building. The cores, for example, are much more Construction Inflation in % pa #
complex than its conventional counterparts. Their Country
In this article and for cost comparison purposes, designs are crucial for both structural rigidity as
tall buildings refer to skyscrapers of 40-storeys or 2009 2010
well as operational efficiency.
more.
Brunei 2 to 5 2 to 5

China -1 5

India 0 to 5 0 to 5

Indonesia 3 6

Hong Kong -1 7

Japan -2 -2
The shape and geometry of a tall building defines
Cost Drivers of Tall Buildings very much the overall efficiency of its floorplate, Kazakhstan 5 -
with slimmer buildings suffering in this respect
It is necessary to think through the cost drivers in from lateral size constraints and higher wall-to- Korea 4 5
great detail right from the outset due to the floor ratios. As such, they are far more expensive
complexities apparent in such developments. to build. Malaysia -8 5 to 7

In September 2008, the 101-storey, 492m tall Often, developers opt for a mixed reinforced and Pakistan 10 15 to 20
Shanghai World Financial Center (Re: Selection steel structural frame as opposed to - for
of DLS Tall Buildings, page 3) was officially example an all structural steel set up due to Philippines 0 to 7 4 to 6
opened. cost considerations especially in countries where
Singapore -20 3 to 5
the price of steel is expensive.
DLS are currently working on the Goldin 117 Thailand -11 0 to 5
Tower project in Tianjin, China. This is a In China, for example, both the Tianjin Goldin 117
117-storey, 600m tall mixed-use development. Tower and the Shanghai World Finance Centre Vietnam -3 to -5 5
adopt a concrete core and steel structural frame
comprising mega columns and braces, outriggers
and belt trusses. # DLSI Estimates
To Page 2
 Asia
April 2010

From Page 1 Conversely, the benefits of standardization provide

Facade
economies of scale and tall buildings also allow more
efficient use of prime real estate. Tianjin Goldin
In addition to providing external aesthetics, the
facade is critical to a buildings overall environmental Developed as iconic landmarks, any spin-off 117 Tower
strategy especially in controlling heat gain and infrastructural planning promotes long term sustainabil-
loss. ity for the project and its surrounding area.

Depending on the design and selection of materials, In this respect, a tall building can be an epicenter for
facade generally constitutes 15% to 20% of the measured urban growth and an example for best
overall construction costs of tall buildings. construction practice through the optimization of cost
drivers right from the outset of its development.
High wind pressures are important considerations
especially those featuring a naturally ventilated
facade as a design element. MIPIM Asia Awards 2009
Cost efficiency can be achieved through the use November 2009 saw the third MIPIM Asia Awards
of simple designs and repetitive detailing due to ceremony take place in the Hong Kong Convention
the option to pre-fabricate unitized facade and Exhibition Centre, in the presence of The
elements off-site rather that on-site. Honourable Mrs. Carrie Lam, Secretary for Develop-
ment of the Hong Kong SAR.
Vertical transportation Shanghai World Financial Centre and Raffles City
A key consideration in the design of a vertical Beijing were honored in the Best China Projects
transportation system in tall buildings is to reach category both Davis Langdon & Seah projects.
the optimum balance between the quality and Another DLS project, the Shanghai World Financial
quantity of lift services provided (usually Centre also won the Mixed Use Building Category at
expressed in terms of waiting time) against the the same awards.
capital cost of the lifts and the loss of revenue- Congratulations to all project team members!
earning, tenantable space taken up by the lift
cores and plant rooms.

Recent advances in destination hall calling Shanghai World Financial Centre

technologies have increased travel efficiency Shanghai, China
and, on some projects, reduced the overall
number of lifts required - thus also saving capital
costs. Situated in Pudong, the 101-storey
building is mainly office space, with Client : Goldin Properties
As a buildings height grows, consideration will a retail podium, 5-star hotel and an
likely shift to the use of specific zones and observatory deck at the 100th floor. Architect : P&T Architects and Engineers Ltd.
transfer floors such as sky lobbies, double-deck CFA : 380,000 m2
and express lifts to pre-designated floors.
Completion : 2015 (scheduled)
Constructing Tall Raffles City Beijing
Beijing, China DLS Role : Full QS Services
For the construction of tall buildings, experience
counts particularly in the area of co-ordination to
The development Chinas Tianjin Goldin 117 Tower is a 600-metre
ensure high levels of cost efficiency and avoiding consists of a 21-storey tall, 117-storey mixed development.
unnecessary, and time wasting, duplication of tasks. office tower, 5-storey
retail podium, 15-storey Scheduled for a 2015 completion, the building
The main contractors preliminaries for tall buildings
comprises offices and a hotel.
include the additional transportation and handling of residential and 17 storeys of serviced apartment.
materials as the building grows taller.

As the construction progresses in the upper regions

of the tall building, time management and safety
Project Monitoring
issues become more crucial. What is it?
The purpose of Project Monitoring is to protect the Clients interest by identifying and advising on the risks
Another issue that needs to be tackled early on is the associated with acquiring an interest in a development that is not under the Clients direct control.
use of standardised prefabricated components which
would help optimize the pace of a construction Our team has the experience and expertise to act as an investigator and advisor for:-
programme. funding institutions, which may acquire the scheme as an investment upon completion; or
Addressing these issues when formulating a tenants or purchasers who enter into a commitment to lease or purchase a property upon completion; or
procurement strategy would help achieve a balance banks or other financiers where a loan matures at the end of the development period; or
between the method of construction and construction grant funders; or
cost to achieve maximum efficiency in the construction private finance initiative funders and end users.
programme.
Why you need it?
Sustaining Tall Buildings A project monitoring consultant can be your eyes and ears during the development process when you are not
Central to all these strategies is the underlying need in direct control of the development; our Clients would have:
to ensure that tall buildings not only live up to their enhanced risk management;
status as iconic landmarks but also their long term enhanced financial management;
sustainability. enhanced programme management; and
enhanced quality management.
Tall buildings are, per se, a paradox to the concept
PAGE 2

of sustainability as they usually require high levels of And perhaps most important of all, Clients can exercise control of the project without the need to tie up their in-house
energy consumption during construction and post project management staff.
occupancy.

Cost Management & Quantity Surveying| Capital Tax Allowances | Cost Engineering | Due Diligence | Project Monitoring
Sustainable Construction | Insurance Valuations | Legal Support | Project Management | Management Consultancy | Research Studies
 Focus

April 2010
A Selection of DLS Tall Buildings
Bangkok, Thailand Singapore Macau, China 1. Empire Place (45 storeys)
27. 1. 2. 3. 4. 5. 6. 7. 2. Mahanakon Bangkok (77 storeys)
3. Hansar Residence (45 storeys)
4. OCBC Centre (52 storeys)
5. Marina Bay Residences Phase 1 (55 storeys)
6. The Sail, Marina Bay (70 storeys)
wikipedia.org www.h88.com.sg
7. Macau Tower (338m)
8. Menara Citibank (50 storeys)
Kuala Lumpur, Malaysia Manila, Philippines Jakarta, Indonesia
8. 9. 10. 12. 13. 14. 15. 9. Menara Maybank (54 storeys)
10. Menara Telekom (77 storeys)
11. OCBC Centre (52 storeys)
12. 1322 Roxas Boulevard (58 storeys)
13. Pacific Plaza Towers (57 storeys)
14. Plaza Indonesia Tower & The Keraton (48 storeys)
15. The Ritz Carlton Hotel (46 storeys)
Seoul, Korea Shenyang, China Beijing, China 17. AIG Tower (55 storeys)
17. 18. 19. 20. 21. 22.
18. The 1st World (64 storeys)
19. North East Asia Trade Tower (68 storeys)
20. Forum 66, Shenyang (68 storeys)
21. CCTV Headquarters (54 storeys)
22. Beijing Silver Tie Centre (62 storeys)

Hong Kong, China Guangdong, China

23. 24. 25. 26. 27. 23. The Sorrento (74 storeys)
24. Highcliff (73 storeys), The Summit (56 storeys)
25. The Center (74 storeys)
26. Pearl River Tower (71 storeys)
27. CITIC Plaza (80 storeys)

Shanghai, China
28. 29. 30.
28. Jin Mao Building (88 storeys)
29. Shanghai World Financial Centre (101 storeys)
30. Plaza 66 (61 storeys)

A Case Study on What DLS actually did

No two Clients require exactly the same Project Monitoring services coverage. DLS fully discussed and
Risk Prevention explored with the Client (the Investment Fund in this particular case) in light of the Clients expectations and
the particulars of the development to understand their key concerns and to agree on a bespoke scope of
The aim of DLSs Project Monitoring role on this services best fit for purpose. In this case study, the Fund formed a JV with a small local Developer and DLS
particular project was to protect the Clients interests. were instructed to monitor and coach the Developers teams to ensure a successful project delivery.
To achieve this, DLS went beyond being the Clients Cost Appraisal and Control
eyes and ears. In the featured project, we played By exploring the project requirements, we worked in parallel with the developer on their development
the role of an advisor to explore options and to budget;
recommend steps to be taken to overcome or
Through the recommendation of alternative materials, equipment and design, we achieved a figure accept-
alleviate problems or situations encountered.
able to developer and the financiers. Client Developer
Throughout the design stage, we drew on our in house architectural, structural and MEP cost management
expertise and experience in reviewing and providing advice on the various proposed design options. This
helped to achieve a more cost effective and higher quality Project
final design solution. Project
Monitoring Manager
Time Factor
Timing is of the essence in any development. Using our all-round experience in the construction field, we
advised on reference mile stones for the project. This meant that progress of the design, tendering,
Design
contract award and site progress could be more easily controlled. Construction Supervising
Team EngineerTeam
In this exercise we tapped into our data bank of time schedules for comparable project types. The master
programme, design, procurement, construction and handing over programmes were all scrutinized to
ensure the programme was correct from the outset and all subsequent adjustments were monitored - with an
early warning on any possible departure from the targeted time frame.
Technical Concerns
Our Project Monitors covered design, technical and quality concerns in the capacity of well-experienced
surveyors /project managers.
Project Residential Project in Tianjin
Developer A Local Private Developer Comments on the reasonableness of building layouts, proportions of different functional elements, deploy-
ment of different faade options and the functional and cost effectiveness of different materials; in particular
Investor A US based Investment Fund those for environmental considerations were our key concerns during the design development;
PAGE 3

We also carried out site reviews of the levels of site safety and quality of workmanship.
Davis Langdon & Seah International is an independent multidisciplinary international construction and property consultancy
with a staff of over 5,000 people in 106 offices in 28 countries worldwide. Please visit: http://www.davislangdon.com
Brunei | China | Hong Kong | India | Indonesia | Japan | Kazakhstan | Korea | Malaysia | Pakistan | Philippines | Singapore | Thailand | Vietnam
Africa | Australia | Continental Europe | Ireland | Middle East | New Zealand | United Kingdom | USA
 2009
April 2010
Regional Roundup

March
Brunei Japan Singapore
The industry is showing significant growth especially There was a significant slowdown in Construction Due to the global economic crisis, construction
in the housing sector. The key driver is the Output during 2009. demand for 2009 declined drastically to a low of S$21
governments commitment to increase the production billion, which is approximately 40% lower compared
of houses under the National Housing Scheme. We expect Output to remain around these levels to 2008.
during 2010, with a marginal increase due to Total construction demand for 2010 is forecast to
Material prices are expected to show a steady and increased public works expenditure. reach a healthy and sustainable level of between
moderate increase over the first and second quarters S$21 and S$27 billion.
of 2010. The residential and office sectors experienced
decreased (-20%) construction activity in 2009 and The public sector is likely to remain the key construc-
we expect activity to remain at current levels in 2010. tion demand driver although construction demand
China / Hong Kong from the private sector is anticipated to increase
China should be able to achieve if not exceed the The slowdown in Construction Output during 2009 moderately albeit from a very low level.
targeted GDP growth of 8% for 2009. It is affected all parts of Japan except Hokkaido, where South Korea
expected that the growth for 2010 will be back to overseas investment activity in the resort sector has Public construction will take the lead in the market
double digits. Property prices continue to shoot up picked up again following a slowdown during 2008. until the third quarter 2010 with orders slowly picking
especially in the main cities like Beijing and up.
Shanghai and the central government has already
announced that measures will be introduced to Malaysia In parallel with the recovery of the domestic economy,
Overall construction growth is likely to still be slow non-residential construction orders and investment
prevent over-speculation. However, the last few are also trending upwards.
parcels of land auctioned in these main cities at despite prospects in infrastructure and public
the end of the year were still sold at record prices. housing. Housing construction orders are gradually increasing.
Move-in supply in 2010 is expected to increase by
We are also noting a continuation of the trend of There have been, however, some concerns in the around 6% compared to the same period last year.
the big foreign developers moving to the second & office sector with several major aborted deals. There
third tier cities, whilst the major players in the first will be a further softening in office rentals with the
tier cities tend to be local developers. completion of new projects especially in Kuala
Lumpurs Golden Triangle.
Locally in Hong Kong, the private sector remains
fairly lackluster. Public sector spending on a Construction inflation is likely to increase with the
number of core infrastructure projects is likely to renewed demand for building materials as the sector
increase over the next few years, with the recovers, projected at 3.5% in 2010.
downside being a likely delay in other publicly- Thailand
funded building works. There are signs the construction sector is recover-
Pakistan ing in tandem with the economy. A mild 2 to 3%
Economic growth for the fiscal year of 2010 is expansion is projected for 2010.
Indonesia estimated to be at around 3.3%, as forecast by the
2009 ended and 2010 has started with promise of State Bank of Pakistan, a little higher than that of Central to this growth is public infrastructure
an increase in construction activities as compa- last year which stood at 2.4%. investment as part of the governments stimulus
nies gain more confidence that the worst of the plan. Transport and mass rapid transit systems as
problems of 2008/9 are behind them. A recent study has shown that there is a shortfall well as natural resources and renewable energy will
of 7.9 million housing units in Pakistan, providing be a key focus.
The presidents approval rating has fallen in the an investment opportunity for foreign developers.
wake of some very high profile difficulties but this Vietnam
There was marginal growth in Construction Output in
is unlikely to affect the stability of the government Philippines 2009 and this is reflected in the year-on-year fall in
in the short or mid-term. Government sponsored activity in the power and construction costs between 4Q08 and 4Q09.
transport sectors should ensure that the Philippines
India In the second half of 2009, we noticed an increase in
register strong infrastructure growth in 2010 with feasibility and project appraisal work and this should
Strong government and power sector spending predictions it will expand by 9.4% in real terms.
manifest into increased construction activity in 2010.
should see a revival of capital expenditure in
infrastructure. Construction material costs are Property players are expected to pose a cautiously The predominant drivers which will spur output in
likely to rise principally on the back of increased optimistic outlook on the market with overall growth 2010 will be local private investment stimulated by
fuel prices and demand. forecast at 5%. relatively low credit costs and also ODA and state
investment into infrastructure.

Brunei (2 offices) China & Hong Kong (12 offices) India (5 offices) Indonesia (3 offices) Kazakhstan
Main Office: Bandar Seri Begawan Main Office: Hong Kong Main Office: Bangalore Main Office: Jakarta Main Office: Almaty
Tel : (+673) 233 2833 Tel : (+852) 2830 3500 Tel : (+9180) 4123 9141 Tel : (+6221) 739 7550 Tel : (+7 727) 264 1952
Email : dlsbsb@dls.com.bn Email : dlshk@dlshk.com Email : dlsindia@dls.co.in Email : dlsjkt@dls.co.id Email : dlskz@dlskz.com

Japan Korea Malaysia (5 offices) Pakistan Philippines

Main Office: Tokyo Main Office: Seoul Main Office: Kuala Lumpur Main Office: Karachi Main Office: Manila
Tel : (+81) 3 6459 1277 Tel : (+822) 543 3888 Tel : (+603) 6156 9000 Tel : (+9221) 3524 0191 Tel : (+632) 811 2971
Email : info@dlsjapan.com Email : dlsk@dlskorea.com Email : info@dlsjubm.com.my Email : info@dls.com.pk Email : manila@dls.com.ph

Singapore Thailand Vietnam (2 offices) Compliments of:

Tel : (+65) 6222 3888 Main Office: Bangkok Main Office: Ho Chi Minh City
Email : dlssp3@dls.com.sg Tel : (+662) 253 7390 Tel : (+848) 823 8297
Email : general@dls.co.th Email : dlsvietnam@dls.com.sg
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DLS Dynamics is published biannually, and circulated on a complimentary basis to all staff and business associates of Davis Langdon & Seah.
Published in Hong Kong by Davis Langdon & Seah Hong Kong Limited, for Davis Langdon & Seah Asia Offices.
DLS Dynamics provides a synopsis of the news, views and topical issues related to the construction industry, and is intended for information and discussion purposes only.
Whilst every care is taken to ensure accuracy and completeness, no reliance should be placed on any part of its contents. All rights reserved.
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