Investors: Mitigating Construction Cost Inflation Risk in Europe

The current period of elevated inflation presents particular challenges for the construction sector. Development incurs high costs in energy and materials, both of which have seen steep increases, compounded by labour shortages in some areas.

What should investors and developers expect in this challenging cost environment? How far might it affect project commercials and viability, and what steps can they take to limit the impact? 

Here we outline the cost inflation outlook across key European office markets, and identify a range of strategic and tactical steps that investors, developers and funders can deploy to mitigate cost risk.