By Andy Sambidge
Citi Construction Tracker shows UAE market has grown for first time since first quarter of 2010
Projects planned and underway across the Gulf region now total more than $2,000bn, up 12 percent on the year-earlier period, according to Citi's MENA Construction Projects Tracker.
The Citi report said all markets across the GCC had risen, mostly driven by new project announcements.
It said this is the first period since the first quarter of 2010 that the UAE has shown growth in its construction market which is up six percent to $614bn.
"This is driven by the recently announced Dubai mega real estate projects," the Citi report added.
In November, Dubai ruler Sheikh Mohammad Bin Rashid Al Maktoum announced plans to build a new multi-billion dollar city project called Mohammed Bin Rashid City.
It will include the world's biggest shopping mall, 100 hotels, a Universal family theme park and a park that is a third bigger than Hyde Park in London.
In the same month, Dubai approved the development of a AED10bn destination that will feature five distinct theme parks based on movies, animals and fun characters that shall appeal to all demographics.
Citi's report said: "For the UAE focus is now on a potential revival in Dubai. While real estate development spend is rising we believe the key bottleneck for the emirate remains financing."
It added that preliminary stage projects in the UAE now stood at $199bn, up 127 percent from Oct, driven by Sheikh Mohammed's announcement.
"To note, this project is yet to reach the feasibility stage. Given Dubai's upcoming major debt refinancing we believe this project is at risk of delay," Citi said.
Elsewhere in the Gulf, Saudi Arabia's planned projects are up 19 percent but has slowed. It remains the largest GCC market with projects totalling $790bn.
"To some degree we would expect some slowing of growth given the size of the market," Citi said.
The report showed that Kuwait projects were up 16 percent to $206bn but added that delays were a key risk due to geo-political factors.
Qatar's planned projects are up six percent year-on-year to $228bn while growth in Bahrain has slowed to stand at $64bn and Oman is up six percent to $122bn.
For the main markets in the Middle East and North Africa, the project pipeline was up five percent to $308bn since October, Citi's report said.
It added that the growth was driven by Iraq (up 29 percent), the UAE (up 15 percent) and Saudi Arabia (up four percent).
Early stage projects were up 17 percent to $655bn over the same period, mostly driven by the UAE (up 127 percent).
Citi said the value of cancelled and delayed projects in MENA currently stands at $1,449bn.