Dubai's projects industry bullish at Dh1.15 trillion

dubai - Urban construction sector has more than 3,200 active projects

With a total of 4,000 active projects worth an estimated $313.6 billion (Dh1.15 trillion) underway, Dubai's projects industry trends look set to remain upbeat through 2017.
The projects in the pipeline include those in the concept, design, tender, under construction and on-hold phases, and constitute 39 per cent of the number of active projects and 42 per cent of the total estimated value of all active projects in the UAE, construction analytics by BNC (Business News for Construction), has revealed.
Latest data from BNC's Dubai Overview Report shows that the urban construction sector has more than 3,200 active projects amounting to a combined estimated value of over $245 billion. This is followed by the transport sector with 187 projects valued at $32.4 billion, the utilities industry with 203 projects valued at $24.3 billion, 377 industrial projects valued at $5.8 billion and 12 projects in the oil and gas sector totalling $4.6 billion.

Some of Dubai's current mega projects include the Dubai Metro Red Line extension, which is a part of the Expo 2020 initiative, Container Terminal 4 of the Jebel Ali Port Expansion project and the Royal Atlantis Resort and Residences located in Palm Jumeirah. The Dubai Harbour project will see the construction of a waterfront development spanning more than 20 million square feet.
In December 2016, 37 active projects worth an estimated $2.2 billion moved into construction mode in Dubai. As of the end of 2016, the total number of projects under construction was 2,508 with an estimated worth of around $92 billion.
President and executive chairman of Al Fara'a Group Dr J.R. Gangaramani said regional construction has remained largely resilient in the face of oil-related volatility despite the ?liquidity constraints.
"The UAE construction sector is projected to sustain robust growth over the coming years thanks to grand ventures currently being implemented in Dubai, which will host the Expo 2020. Likewise, Abu Dhabi is expected to announce a number of projects by the end of the second quarter which bodes good for the entire construction sector," Gangaramani told Khaleej Times.
Rizwan Sajan, chairman, Danube Group, said as Dubai moves towards the Expo 2020, the construction sector alongside the government is gearing up to prepare for the influx of people coming in.
"In addition to the initiatives taken on to enhance infrastructure and extend the Metro line towards the Expo 2020 sites by the government, private developers are also playing a key role to ensure that real estate as well as hospitality and industrial projects are being established simultaneously as part of the Expo 2020 plan," said Sajan.
Faizal E Kottikollon, founder and chairman of KEF Holdings, said it is heartening to see the UAE's construction sector continue to hold strong despite global economic trends. "We approach milestones such as the Expo 2020, the resulting demand needs to be met by sustainable and disruptive solutions, where delivery of infrastructure is on schedule and in line with the requirements of the nation's growth. This is where we see the need for infrastructure development that builds on automation and robotics, which can deliver cost and time savings,and really fast forward our progress in today's digital world," he said.
Dubai's Dh47.3 billion budget for 2017 has earmarked 17 per cent of the total spending for infrastructure, reflecting the emirate's concern for the gradual implementation of the Expo 2020 projects. Analysts at Moody's expect the surge in infrastructure spending would support Dubai's construction industry and real GDP growth at a time when most GCC governments are reducing spending and economic activity continues to slow in the region.
Consultancy firm Deloitte has estimated projects worth $2 trillion are in the pipeline in the Gulf countries despite a 17 per cent decline in the forecast of contracts awarded last year. The "strongest" activity is forecast in Saudi Arabia and the UAE, it said.
Construction, transport and power are forecast to be the leading sectors, with shares of 52 per cent, 19 per cent and 11 per cent respectively, Deloitte said.
Gangaramani said the construction sector in the UAE has recovered from the fallout of the world financial downturn and continues to offer lucrative investment opportunities, indicating that the construction market will remain strong during the forthcoming year.
"With a number of mega projects in the pipeline and the ramping up of social infrastructure spend, the construction market in the UAE is on its way to near full capacity. I believe 2017 will be a very good year for the construction sector and we will be able to see these results from the third quarter onwards," he said.
David Clifton, regional development director at Faithful+Gould, has forecast that contracts worth Dh165 billion would be awarded in the UAE during 2017. This represents a growth of four per cent compared to 2016 estimates, as work ramps up on projects connected to Expo 2020, Dubai Creek Harbour and Dubai South.
Clifton predicted a "small level of recovery" for the UAE's construction market in 2017. However, he also noted that declining global liquidity could lead to an extended timeline for some mixed-use projects in the UAE.
"The effect on the UAE's pipeline of planned projects won't be dramatic, but it will extend the delivery horizon of Dh3.16 trillion-plus of schemes from approximately 10 to 25 years," he added.
- issacjohn@khaleejtimes.com