BCCJ Member Spotlight: Nick Heald (Managing Director , Turner & Townsend)

Global professional services company Turner & Townsend—which specialises in major
programmes, programme management, cost and commercial management, net zero and digital solutions—has released its International Construction Market Survey (ICMS).
Each year, ICMS aims to provide insight on how the industry is performing, the
challenges it faces and its future outlook. It serves as a useful barometer of the general
health of the global construction industry, as well as the performance of individual
markets and collective regions.

The British Chamber of Commerce in Japan spoke to Nick Heald of Turner & Townsend, to uncover some key findings from ICMS 2024 and learn more about the company’s activities in Japan.

What’s the background to ICMS 2024?

To produce the 2024 report, we brought together data, insights and experience across 91 global markets in 42 countries. In its 15th year, the report added three new unique
markets in Japan, expanding the coverage to Tokyo, Osaka, Fukuoka, Hiroshima and
Sapporo.

Our team of global economists collaborated with our local specialists to evaluate input costs—such as labour, materials and plant—and outlined the average construction costs per square metre for multiple asset classes across several sectors in key markets. Cost data was collated in Q1 2024 measuring the performance of projects and programmes across the previous calendar year. This information provides global context and a richer understanding of the balance of supply and demand, and the cost pressures, within each market.

What are some key insights on Japan from ICMS 2024?

Our findings show that Japan, which has often seen its cities come top of the ICMS
ranking for construction cost, no longer has any markets in the top 10. This is a
reflection of globally high inflation, the devaluation of the yen and the country’s
comparative ability to manage construction cost escalation while supporting high
growth in industries including data centres, advanced manufacturing, retail and urban
development. Osaka, the world’s 17th most expensive market to build in at
US$3,985/m 2 , is seeing a development boom as it prepares for Expo 2025.
Japan is also seeing market pressures that are felt keenly in procurement for all
projects, irrespective of size and scale. Our internal research shows that general
contractors are unlikely to tender for projects within the coming year, and
subcontractors are mostly disinterested in tendering up until the end of 2027.
Construction inflation, forecasted at 5.9% for 2024, has slowed since the pandemic is still set to remain higher than general inflation. As part of our service, we provide monthly reports to all of our clients outlining key market trends in Japan.

What else is new at Turner & Townsend?

In June 2024, we announced our plan to combine CBRE’s project management team
with Turner & Townsend to create an offer that is unmatched in scale and breadth of
capabilities, working on the most ambitious and important projects and programmes
across the globe. Our business will grow to more than 20,000 employees, serving
clients in over 60 countries.

In Japan, we will double our headcount, expanding our depth and capability of project
delivery in the market. This plan is aligned to our ambition to create the premier,
differentiated programme, project and cost management capability that we set out to
achieve when first joining forces with CBRE in 2021.

What’s at the core of your DNA?

Working in partnership makes it possible for us to deliver the world’s most impactful
projects and programmes. We collaborate with our clients across real estate,
infrastructure and the energy and natural resources sectors, to deliver projects and
programmes that transform businesses, improve people’s lives and benefit the future of our planet.

In addition, backed by over 75 years of experience and currently with over 12,000
people in 49 countries, we help our clients embrace the future and navigate the ever-
changing challenges of complex major projects and programme delivery.

How is the company developing in Japan?

In April 2024, we moved our Tokyo office to a new location in Tamachi. Our new
office will enable us to work even more collaboratively with our clients and partners, as
we take tangible steps towards meeting our environmental objectives and enhancing
employee wellbeing. The office has been scaled to meet business growth and forms part of our plan to cover key economic hubs in Japan. Currently we have active offices in Tokyo and Osaka.

As more international investments flow into the real estate, infrastructure and energy
and natural resource sectors, we have seen a surge in demand for project controls that drive transparency, essential for enabling more informed business decisions. At a time when construction costs are at an all-time high, with challenges in securing labour and materials, our team offers clients independent consultancy advice to manage risks to project costs and programmes.

What’s unique about your services in Japan?

One of our key differentiators in Japan is our independent operating model. Unlike
many of our local competitors, we are not a multi-disciplinary business – operating
independently from architectural and engineering practices. Our reputation has been
built entirely on our three core services; project management, cost management and
advisory.

We are passionate about bringing international best practice to our local offices to
transform performance, including Japan’s well-structured but traditional industry. We
are also proud to have a team that offers clients unparalleled bilingual capability,
meeting the requirements of increasingly complex, international project structures.