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July 4th 2019Real Estate News

UAE construction projects’ value hits Dh3 trillion in June

The UAE’s construction sector will remain active over the next decade despite slowdown in global economy as total value of projects in the country hit Dh3.05 trillion in June, according to a report.

BNC Network said in its latest report said the UAE is the second largest construction market in the GCC with Dh3.05 trillion projects after Saudi Arabia’s Dh3.29 trillion projects. However, the UAE leads in urban construction projects with Dh1.75 trillion worth of projects under way followed by Dh1.49 trillion in Saudi Arabia. Both the countries control 69 per cent of the total GCC construction market and 79.5 per cent of urban construction market, respectively.

More than 26,000 construction projects exceeded Dh9.25 trillion last month, the report added.

Property developers and industry executives said ongoing mega projects will continue even beyond 2020 as the government may come up with surprise announcement to launch new mega developments that will keep the local job market active and contractors busy. They believe that Expo 2020 is not the end, but the beginning of construction industry as the government could bid for mega sports event such as Olympics and also launch another 10-year programme to stimulate the economy.

“Expo 2020 is a new beginning and not the end for Dubai’s construction industry,” Avin Gidwani, CEO of BNC Network, told Khaleej Times.

Following the Expo 2020’s successful bidding, it is believed that Olympics can possibly be the next major event that Dubai or Abu Dhabi can bid for which will drive not just the construction but the economy as a whole. Abu Dhabi has already hosted Winter Olympics generating nearly Dh1 billion in economic activity during its 10-day run. Moreover, it is also spending Dh50 billion under Ghadan 21 programme.

“The construction going on for Expo 2020 Dubai is to complete another piece of the puzzle if you refer to Dubai’s original city plan as the city is built systematically piece by piece. It is highly likely that Dubai will come up with another 10-year plan that will include project announcements such as Mina Rashid which will continue to drive Dubai’s construction industry even after 2020,” said Gidwani.

He pointed out that the remarkable initiative launched recently by the Roads and Transport Authority was a unique package of six urban engagement projects – Sunset Promenade, Deira Plaza, Skypods, Umm Suqeim pedestrian bridge, Sheikh Zayed Road promenade, and the Sky Garden.

“Other massive projects that will keep construction active post-2020 include the Dubai South, Mina Rashid and Deira Islands,” he added.

Lewis Allsopp, CEO of Allsopp & Allsopp, said Expo 2020 has brought a lot of construction to Dubai, however, there is always going to be developer interest in the city beyond Expo 2020, if not more.

“The Expo will generate more interest in Dubai and showcase the business potential of the city. With more businesses thriving in, the more potential for developers,” he said.

Citing examples, he said Emaar Beach Front is due to handover in third quarter of 2021 and was sold out earlier this year before construction began. Dubai Creek Development, which will take years to complete with the world’s new tallest building, will handover after Expo, as well as Port De La Mer by Meraas. In addition, The DIFC 2.0 mega project will bring another 13m sqft of built-up area to DIFC which will include offices, residential, innovation, retail and hotels.

“These are only a few developments coming after Expo 2020 and I am sure we will see lots of exciting development plans in the near future,” he added.

Sudhakar Rao, chairman of Gemini Property Developers, said the real estate and construction sectors were never dependent on Expo 2020.

“The Expo 2020 helped new project launches and execution – that helped additional facilities being built. Following the Expo 2020, both the sectors will be driven by the real demand and supply situation and how the overall economy performs. If the existing supplies are absorbed by continued demand, we will see more projects coming up in the next few years,” Rao said.

All rights reserved to the initial publisher for Khaleej Times.

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