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In Abu Dhabi, some 48 real estate projects
worth AED99bn are underway. In general,
the health of the UAE’s construction
sector (we have seen mega-projects that
were halted at the onset of the global
financial crisis resumed) has supported
the wider industry in the region. In the first
half of 2014, for example, construction
contributed eight percent to Dubai’s GDP
and we expect this figure to rise over
the coming years as mega-projects are
announced in the build up to the World
Expo 2020, which the emirate will host.
In the last quarter of 2014, five major
international construction exhibitions
were held in the UAE, demonstrating
the support the sector enjoys
internationally, both in the UAE and
the GCC. Sales of building materials
at these conferences were believed to
be up on the previous year by as much
as twenty percent, and more deals are
likely to be done at 2015 exhibitions
as a result of recent and upcoming
mega-project
announcements.
The UAE’s construction sector,
thanks to the excellent infrastructure,
particularly in Dubai, that facilitates
the transport and import of materials,
is optimally placed to thrive. As the
government looks to increasingly work
with private sector developers in the
creation of new centres of commerce
and economic cities, we expect the
industry to go from strength over the
coming decade, supported by beneficial
legislation and strong liquidity.
Mazaya Monthly Real Estate Report -
Week 1 - APRIL 2015
4
Throughout the GCC, the construction
sector relies on GDP growth and
infrastructure spending by government
for stability and growth. Prospects,
therefore, are good, even though the
oil price has weakened: AED800bn of
projects are expected to be announced
over the coming five years throughout
the region. Although it is inevitable
the industry will face the challenges
to which it has become accustomed –
typically, caution over lending by banks,
fluctuations in the costs of materials,
recruiting
skilled
manpower
and
competition from overseas construction
firms – it is expected the industry will
thrive while remaining competitive.
The UAE’s economy is forecast to grow
by 4.5 percent this year, compared
to four percent in 2014, despite
difficult global financial conditions.
Likeweise, we expect the economies
of most other GCC states to perform
well. The prospects, then, for the
construction sector throughout the
region, and particularly in the UAE,
are very good, in the opinion of
Al Mazaya Holding weekly report.