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Wed 2 Apr 2014 02:27 PM

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UAE resumes work on $12bn worth of stalled projects

New data shows construction contracts worth $23bn are expected to be awarded this year

UAE resumes work on $12bn worth of stalled projects
GCC construction, Middle East construction

Projects valued at more than $12bn have resumed construction work in the UAE over the past 18 months with more expected to get the green light this year, according to a new study.

The pace at which stalled projects resumed construction activity has increased since Dubai won the right to host the Expo 2020 as positive sentiment returned to the UAE real estate market, MEED Projects said in a statement.

It said it expects there to be $23bn worth of construction projects awarded throughout 2014, with more than $5bn having been awarded during the first quarter of the year alone.

It said more than $23bn worth of projects were awarded in the construction sector last year, 55 percent of which were for mixed-use or residential developments.

The volume of projects awarded made 2013 the second best year for project awards since 2008, a sign of the UAE's strengthening economy, it added.

Its figures showed that more than $1.8bn hospitality projects were awarded last year - the highest since 2010 while over $800m retail projects were awarded, the highest for five years.

Julian Herbert, director of MEED Projects said: “2013 showed some of the most promising growth in the construction sector since 2010, with especially strong figures in the residential and mixed-use sector of the industry.

"This is a positive sign of increased investment in the UAE's economy, both from developers and from property investors - the large number of residential project awards alone demonstrates that there is a rising demand for such buildings, indicative of a growing population.

"The UAE is well on track to returning to the levels of investment last seen in 2008, with 2014 expected to be even better."

The report said Habtoor Leighton Group has dominated the UAE real estate construction sector from 2008-2014, having secured close to $10bn worth of real estate construction contract awards.

Arabtec has won upwards of $5.5bn worth of contracts, with other top contractors within the same period being Al Jaber Group, Arabian Construction Company and Al Futtaim Carilion.

MEED Projects is an online business development and market analysis tool which provides project data from across the Middle East and North Africa.

In January, research showed that construction projects worth $69.91bn were completed in the GCC in 2013.

Conducted by Ventures ME, the research also estimated that 2014 would see a 17.4 percent rise in completed projects at $83.41bn and $82.2bn worth of projects will be awarded during the year.

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Red Snapper 5 years ago

Speaking to mortgage brokers and consultants, the market has slowed down by nearly 80% , SINCE NEW RULES REQUIRING 25% down payment were introduced.
Seems like not many people have or are willing to fork out such huge amounts anymore.

Similar story on cnbc.com yesterday

The Consultant 5 years ago

@RS, are you referring to the off-plan market or the completed properties market? Based on information gathered from various fairly reliable sources, it seems that the completed property market has slowed right down, but off-plan sales seem to be booming; even 2nd and 3rd tier developers can shift their units if they look in the right places for clients. Common sense suggests that that situation cannot continue indefinitely unless all these people buying off-plan are intending to either move in or hold the properties long-term as buy-to-let.

red snapper 5 years ago

off plan are moving because some of them need only 10-20% downpayment and are bought by speculators.
The real end users , the ones who actually purchase a mortgage are hit hardest , as they have difficulty putting 25% down payment on a property.
It has confirmed market analysts wrong who quoted that 80% were cash buyers , when in fact 80% were mortgage buyers - prior to the Central Bank rule.
Ironically, the banks that supported the ruling- Mashreq etc - are the ones hardest hit, along with end users .
Even noted economists at NBAD (which are usually very conservative) were surprised by the Central Bank ruling.

refer to this article:
http://www.cnbc.com/id/101543416