Zurich, Geneva and London are Europe’s most expensive construction markets

The Swiss cities of Zurich and Geneva are the most expensive cities to build in Europe, followed by London. That is according to the Global Construction Market Intelligence report from Turner & Townsend.

The 2025 edition of Turner & Townsend’s report shows that in most major cities, construction costs remain under pressure, driven by labour shortages, supply challenges and surging demand from high-growth sectors such as data centres. These trends have meant that average construction costs edged upwards over the past 12 months.

On the positive side: inflation in construction costs has stabilised in many countries, and the start of interest rate cuts has renewed optimism for financing and development. However, trade tensions and supply chain disruptions continue to pose risks said the report’s authors, necessitating careful capital planning and robust cost management.

In Europe, costs across the continent tend to be high, with most of the cities assessed sitting in the higher parts of Turner & Townsend’s cost ranking. In total, the firm assessed more than 100 cities worldwide.

Switzerland, with traditionally high construction costs, continues to top the European cost table with an average cost to build of €4,978 per m2. Zurich and Geneva sit at third and fourth place in the global rankings, behind New York (€5,309 per m2) and San Francisco (€5,087 per m2) but ahead of London (€4,977 per m2).

“London’s fifth spot reflects the city’s continued strength as a global financial hub, amplified by recent turbulence in the United States,” said Martin Londra, Europe head of real estate and major programmes at Turner & Townsend.

Dublin sits fourth in the European rankings, at an average cost of €3,692 per m2, reflecting a sustained pipeline of commercial and data centre investment. Munich and Frankfurt – as key industrial and commercial hubs – follow at fifth and sixth place within Europe. Vienna, Copenhagen, Hamburg, and Berlin round off the top 10.

Labour challenges

A notable finding for Europe is that all markets surveyed face labour challenges: 100% of the respondents reported insufficient talent for mechanical, engineering and plumbing jobs.

Strain on component supply chains is another concern, especially in specialist segments of the construction sector. In for example Zurich and Geneva, builders are experiencing lead-in times exceeding 41 weeks for vital data centre components like switch gears, while half of respondents currently face similar lead-in times for generators.

Managing for the better

In this context, the authors advise developers and builders to work closely with supply chains at a more local and regional level to manage risk over time. This includes assessing nearshoring as an approach to protecting a more consistent supply of materials and talent.

With a wave of construction projects on the horizon in the coming decade due to investments in public infrastructure, housing and residential, and defence (following EU’s commitment to the NATO), Turner & Townsend said that careful planning and robust delivery will become more important than ever.

“This will require carefully managing supply chains to ensure there is sufficient capacity for the growing demand,” said Londra. “Taking a programmatic approach will also be key, to ensure that the renewed focus on infrastructure and defence does not smother growth in other sectors, such as data centres and traditional real estate.”