Challenges of construction in emerging economies

Abstract

The construction of real estate facilities in emerging markets can be challenging due to a variety of unique constraints rarely apparent to the uninitiated. The process of weaving a thread of efficiency in the disarray that exists, while keeping costs to a minumum can be both frustrating and time consuming. Developing market can pose seemingly insurmountable challenges in construction due to existing economic and financial considerations. A lack of infrastructure, complicated bureaucratic procedures, restricted foreign investment, substandard materials, building standards and design and a lack of competitive market forces are further obstacles to the sector. While a simple lease option may appear a more dependable solution, the financial and operational benefits of constructing a ‘Build‐to‐suit’ facility demand that corporates explore innovative solutions that neutralise the difficulties. The resultant strategy, however, has to be flexible enough to address the myriad possibilities of a company’s growth, its contraction or total withdrawal.