DUBAI // The era of towering cranes and fast-paced prestige projects is back in force.
The UAE has kept its number one spot in the GCC’s construction projects market for the second year in a row, after losing it in 2009 during the global economic downturn.
The Meed Insight report, to be released on Thursday, puts the UAE well ahead of Saudi Arabia.
It also holds the largest chunk of future projects.
“If you look at the value of contracts, in the UAE US$52 billion [Dh190.9bn] worth of contracts were awarded last year,” said Ed James, head of Meed Insight and author of the GCC Construction report 2015.
“And $40bn were in the construction sector for buildings, roads, tunnels, infrastructure, education, healthcare and tourism projects.
“Most of this is in Dubai, which is the real estate hub for the region. Construction projects awarded in Dubai in 2013 were $20.6bn, equal to 52 per cent of all construction projects in the UAE.
“The figure for Saudi Arabia last year for construction projects was $25bn.”
Saudi Arabia remains the largest projects market overall in oil and gas and petrochemicals.
Future construction projects across the GCC exceed $1 trillion, of which the UAE has $428bn and Saudi Arabia has $417bn.
“So the UAE also has the largest market for future projects over the next five years,” Mr James said.
Construction has traditionally been the largest sector in the region, with slightly more than $500bn worth of civil projects, excluding railways and airports, awarded in the GCC since 2006.
This covers active projects, not those put on hold or cancelled.
Private-sector funding challenges is one reason for the large number of deferred projects, the report said.
A combination of on-hold and cancelled projects make up 44 per cent or $1.06tn of the total GCC projects, with more than half in the UAE, mainly Dubai.
The UAE, particularly Dubai, accounts for 66 per cent of the GCC projects on hold, valued at $490bn, and about 64 per cent of cancelled GCC projects, worth $589bn.
The recent construction rebound has been led by property projects announced by the Dubai Government, such as the Dubai Creek canal extension and revived developments such as the tram and metro extensions.
“Obviously Dubai has the most number of cancelled and on-hold projects but that is also because it had most of the projects awarded, and a lot of it was based on private-sector speculation,” Mr James said.
“Also, at the peak we saw $100bn worth of contracts being awarded, which is twice as much as last year.
“What we are seeing now is more government and quasi-government entities announcing projects and people are more comfortable because the companies are government linked.
“The tram was on hold and is now nearly finished. The Metro extension is now revived.
“We have seen on hold projects being revived such as Palm Jumeirah Mall.
“People have learnt their lesson and the market has experienced the crash so new projects today tend to be more commercially viable than the ones we saw in 2007 and 2008.”
About 217 high-profile projects, including the dizzying 1-kilometre tall Nakheel Harbour and Tower, and Dubai’s version of Las Vegas without the casinos in the Bawadi development in Dubailand, were cancelled between 2009 and 2011, Real Estate Regulatory Agency data showed last year.
The market intelligence firm Meed Insight bases findings on data gathered by 40 researchers who monitor the status of projects across sectors in the Middle East.
It tracks more than 15,000 major projects in the region.
rtalwar@thenational.ae
