UAE projects worth $300bn on hold or cancelled

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CONSTRUCTION: More than 400 projects are on hold or cancelled in the UAE. (Getty Images)

More than 400 projects with a total value of over $300bn had been placed on hold or cancelled altogether in the UAE, according to a new report on the construction sector released on Tuesday.

However, stability would begin returning to the Gulf state’s construction sector this year, with signs of recovery emerging during 2010 as cash flow shortages eased, according to the report by Dubai-based research house Proleads Group.

“From our cash flow projections for the industry, we see the UAE construction market beginning to stabilise at current levels and showing some signs of recovery during 2010,” said Emil Rademeyer, director of Proleads Global.

Although a slowdown had cut the number of new projects launched since mid-2008, the UAE remained one of the most active construction markets in the world, with more than 750 projects under construction and 450 completed recently, it said.

The commercial and retail sectors had seen a reduction in new construction projects being started, with education and healthcare projects being placed on hold more often than in the past.

A slowdown was also hampering the leisure and entertainment construction sectors, along with an increasing rate of cancellations in the residential sector, the report concluded.

But multiple projects in several sectors were still scheduled for completion up to 2011, with most set to be finished in 2010.

A liquidity squeeze combined with slackening demand within the UAE’s real estate sector caused by the global economic downturn has led to a dramatic reduction in new building projects and delays or cancellations to existing developments.

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READERS' COMMENTS

The World
Posted by kenny timmons, co.meath, Ireland on Sunday 18 October 2009 at 16:53 UAE time

I am from Ireland, i purchased off plan on Jasmine Gardens the world, Dubai in 2006, i have 50% of my property payed for, no work has started on the project yet but there is only about 10% of this money left in esscrow, where has my money gone.I am told by RERA that this money has being taking to buy the land , but i talk to other poeple that have bought in the same place as me and all there money is in escrow.Things are so mixed up in Dubai and they are getting a really bad name with investers, i would not do any more investing in Dubai/Uae. There are hundreds of people in Ireland with hard luck stories about Dubai and not being able to find where their money has gone. REAI need to act fast. They are forming a big group in Ireland at the moment to go after this money (www.concerneddubaisportscityinvesters.com). If you know anything about Jasmine Gardens The World contact me kennyotimmons@yahoo.co.uk

Actually Admission is a Key Step
Posted by Peter, Dubai, UAE on Tuesday 15 September 2009 at 07:02 UAE time

This is the point the optimists and others seem to miss. Economies don't just get better on their own, they need to be made better, and for that to happen there needs to be trust. And trust, in almost any part of the world comes from understanding, not from blind optimism. Consequently, it is very demeaning to suggest that there is no need to understand the problem, because, by implication, there is no difference one can make. Many of AB readers are in significant positions, and with an improved level of power we can together make a significant difference to addressing the problems that we understand. One reason, I believe, that Dubai has been hit harder than almost anywhere in the world is that there has been a failure to assume that individuals matter and we all make a difference to solving problems.

its everywhere
Posted by Hannan, UK on Monday 14 September 2009 at 19:40 UAE time


Denny - Agreed. I take your point. By admitting or not admitting does not make the problem go away. UK is now in so much debt that it will take one generation to be repaid. Dubai is facing its first recession. Whether they admit to the problem or not doesn't mean anything. Actions speak louder than words.

the difference
Posted by Denny, Dubai on Monday 14 September 2009 at 19:25 UAE time


The difference Hannan - is that in the UK and the USA they admit there is a problem.

The other difference is that Dubai's economy has been largely built on property and tourism, and as such the fundamentals are not as solid in the long term.

Dubai is not a terrible place to live, but it is in quite a lot of trouble at the moment.

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