London replaced as Europe's construction cost capital

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A fall in the value of the pound against the euro has seen Geneva leapfrog London as Europe’s most expensive city for construction projects.

London fell two places to fourth in the annual league table of the world’s most expensive cities to build in, put together by consultant Arcadis.

Hong Kong and Geneva jumped up to second and third respectively, behind New York, which remained the most costly place to carry out construction.

The value of £1 has dropped from 1.29 euros on 7 March last year to 1.15 euros today, according to the X-Rates website.

More than half of the world’s 10 most expensive cities for construction are situated in Europe, according to Arcadis, with Copenhagen, Stockholm, Frankfurt, Paris and Vienna joining London and Geneva.

The report said: “In London, development activity in infrastructure is strong, but key commercial sectors including offices and prime residential have seen a slowdown due to Brexit-related uncertainty impacting some developers’ investment decisions.”

Shanghai (35th) and Manilla (38th) were the biggest fallers overall, both dropping eight places.

The highest climbers in the ranking of 44 cities were Auckland (13th), Belgrade (30th) and Taipei (40th), all of which rose four places from 2016.

Arcadis head of programme management Edel Christie said: “High-density cities like New York and Hong Kong are particularly high-cost locations to build due to constraints with land availability, accessibility and land values.

“Despite this they continue to prosper and see significant development activity thanks to their attractiveness as desirable global cities for commerce and people.

“The cost of building critical infrastructure and new buildings over the course of a long build phase is notoriously difficult to predict, making the challenge of providing as much cost and commercial certainty as possible a vital one.”