Boston and Philadelphia have entered Arcadis’ ranking of the world’s 10 most expensive cities to build in.
It’s the first time the pair appeared in the top 10 since 2018. (Boston placed 10th in 2019.)
They join regulars New York City and San Francisco to give the US four cities in the 2023 table, a testament to a US market made hot by a suite of laws boosting investment in infrastructure and manufacturing amid rising materials and wage costs.
Geneva overtakes London as the most expensive city. These two have swapped first and second places for the past three years.
Boston climbed to 9th place from 13th last year after tender price inflation of about 7% in 2022 driven by life science and biotech companies investing in increased capacity after the pandemic, Arcadis said.
It predicted tender price inflation will drop to 5% in 2023 with a decrease in new office starts partially offset by high demand for housing.
Philadelphia rose from 15th to 10th this year with tender price inflation at 5% in 2022.
Arcadis cites a residential boom as a cause. Projects include a 1,100-apartment project at 1001 South Broad Street, a 1,200-unit scheme at Market Street, and the city’s plan to develop 1,000 low-cost units on city-owned vacant lots.
On the overall picture, Arcadis said the sector faced “tough conditions” in 2022. It said “inflation, construction costs, finance costs and energy prices have all continued to rise, resulting in fewer transactions and tumbling asset values”.