(MENAFN- Khaleej Times) Construction work restarts on $12b stalled projects; $23b contracts to be awarded in 2014
Construction work on more than $12 billion worth of stalled projects in the uae had resumed over the past 18 months underscoring the strong resilience of the economy driven by increasing investor confidence.
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 according to meed projects.
In 2013 more than $23 billion worth of projects were awarded in the construction sector 55 per cent 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 strong sign of the uae’s strengthening economy it said in a report.
The fast revival of the construction sector in the uae is in line with a general upswing in building activities across the gcc. in 2013 the gcc civil construction market showed signs it had returned to growth last year with a total of $59 billion worth of contracts awarded.
Another report by meed estimates the value of live civil construction projects to be just over $1.3 trillion with $935 billion in execution including long-term mega projects $81 billion out to tender $211 billion in design phases and $136 billion under study. this estimate excludes schemes on hold or cancelled.
According to zawya project tracking data compiled in november 2013 around $3.45 trillion worth of projects are in the design bid or construction stage until 2025 in the gcc.
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” said herbert.
He expects $23 billion worth of construction projects to be awarded throughout 2014 with more than $5 billion having been awarded during the first quarter of the year alone. more than $12 billion worth of stalled projects have resumed and this number is expected to increase further during the year.
Habtoor leighton group has dominated the uae real estate construction sector from 2008-2014 having secured close to $10 billion worth of real estate construction contract awards. arabtec has won upwards of $5.5 billion worth of contracts with other top contractors within the same period being al jaber group arabian construction company and al futtaim carilion.
Jones lang lasalle said dubai is set to witness the launch of more mega-developments during 2014 but in a more measured manner than in the run-up to the 2008 financial crisis.
Jll cited several mega-projects announced over the past year including mohammed bin rashid city al habtoor city the dubai canal project and nakheel waterfront in dubai as well as saadiyat island and the capital district (now zayed city) in abu dhabi.
According to law firm pinsent masons about 90.3 per cent of construction firms are expecting the gcc market to improve in 2014 compared with 70 per cent in the prior year.
Dubai chamber of commerce and industry study shows that by 2015 the construction sector’s contribution as a percentage of the uae gdp is projected to record 11.1 per cent and by 2021 it would be contributing 11.5 per cent to the national economy.
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