By Andy Sambidge
New research shows 1,845 projects ongoing amid economic downturn, 69% of total.
Some 1,845 projects worth a combined $657 billion are still active in the UAE, latest research by Dubai-based Proleads revealed on Wednesday.
The study of the civil construction industry in the country, which showed 69 percent of the total projects were ongoing (not cancelled or delayed), split the market into four sectors - Commercial and Retail, Education and Healthcare, Leisure and Entertainment and Residential.
“Throughout our research in each sector we found a number of common issues, said Emil Rademeyer, director, Proleads. “Over two thirds of projects are still active, new projects starting have slowed and projects completing are accelerating and cash flow is declining."
The largest of the sectors by number of projects as well as by budget is the commercial and civil sector, the survey showed. The total market consisted of 829 projects valued at $412 billion.
The residential sector was valued at $312 billion. The survey showed that the rate that projects were being cancelled has accelerated over the course of the year although the largest proportion of projects, were still in progress.
Projects classified within the leisure and entertainment sector amounted to more than $233 billion spread across 445 projects, while education and healthcare has almost 700 projects worth $57 billion.
“So although the overall situation looks stable, unless investment for new projects is found the size of the real estate industry will shrink and its overall shelf-life will be reduced,” added Rademeyer.
In terms of projects currently under construction, the report found Dubai had the larger share of the market compared to neighbours Abu Dhabi.
“This view is supported further when looking at the scheduled completion dates with the bulk of the Dubai projects coming to a close during 2010 and 2011 and Abu Dhabi in 2012 and 2013,” said Rademeyer.
Sure indeed but majority of them are in Abu Dhabi. This is clearly visible by driving DXB AUH highway in early morning
Pig flying past my window as well. Trouble is people have been told sooooooo many STORIES that they dont know what to believe anymore. If someone announces "we are building a $200 BN project" etc etc then I just Yawn and say to myself "hmm another dreamer".
Dubai cannot afford to pay the Japanese companies for their work on the metro. Any foreign builder working on a tower or other project now is going to be whistling in the wind once they send the invoice in. How many of them are actually going to get paid anything? How many will go bust waiting? Dubai really needs to start delivering on its promises, or its reputation and credibility faces a huge downgrade. You cannot take people's money and not deliver property, or build infrastructure and not pay the builders and expect to continue 'business as usual'. It's a double-whammy of bad karma that will make it hard for Dubai to attract either the investors it needs, or the contractors to do the work if they all believe they won't ever get what they're being promised. If Dubai still has some money then it really needs to start paying its bills before the lights and water get cut and it earns a black mark that will hamper it for decades to come. I trust it will do the right thing.
and i'm Spiderman!
Well, hopefully buildings will be filled in, with positive vision of both residents (citizens / expatriates) and authorities., If you see the past story of UAE, it is transformed from Desert to Business centre and can be matured market in few years., Unlike Cost of 300/m2 sold by developer for 600 and resale up-to 2000. Additionally, there are concerns to short-term investors, who may tried for quick bucks, which turnout to be a nightmare, and some of them affected or hardly hit, only if they have purchased from resale, based on false predictions. Apparently, original developers prices are still on. Ongoing projects will drag for another 5 years (if all to be completed), and then force of residents may drive the market.
And so ladies and gentlemen, "the worst is over". But i thought the fact was "crisis, what crisis?".