July 03, 2014
UAE construction sector's pace set to rapidly accelerate with $46 billion in projects for 2014
The UAE construction sectorвЂ™s pace is set to rapidly accelerate in 2014, with the government announcing a number of major development projects and stepping up spending on social infrastructure development.
An April 2014 report by consultancy Ventures Middle East, Exploring UAEвЂ™s Strong Investment Environment remarks that the new projects, combined with many previously stalled projects now forging ahead, will continue to bolster the 2013 upswing into 2014. The same report remarks that the UAEвЂ™s GDP for 2014 is set to grow at four per cent to reach $404 billion, up from $390 billion in 2014, fuelled by the construction sector upturn and support from the oil & gas sector.
The report sets the value of the countryвЂ™s building construction sector at almost 60 per cent of the total projects in the construction industry, followed by infrastructure, oil & gas and power & water, with total construction projects awarded in the UAE totalling 38 billion in 2013. 2014 is expected to reach $46 billion in awarded projects in the country.
DAMAC Properties, one of the largest luxury real estate companies in the Middle East, whose recent developments include the 42 million sq ft master development, AKOYA by DAMAC and the four-tower DAMAC Towers by Paramount project in the Burj Area, is bullish about the upswing in the market:
вЂњThe outlook for the real estate sector in the UAE and Dubai is positive, and this is mainly due to the strong economic growth experienced since 2012. Dubai in particular has continued to witness solid economic recovery and this is reflected on the real estate sector. Strong predicted growth of 4.5 per cent this year will sustain demand for residential property; this explains the continuous solid levels of demand in the market, which is reflected in the growth in rental levels and residential values on the short and medium terms,вЂќ said Ziad El Chaar, Managing Director of DAMAC Properties.
In line with the continued growth, the countryвЂ™s infrastructure sector has seen significant investment and development particularly in roads and airports. Dubai Airports this year announced a $7.8 billion (AED28.8 billion) airport and airspace expansion programme which will boost capacity at Dubai International from 60 million to 90 million passengers per year by 2018.
The investment is designed to deliver aviation infrastructure which will support the continuation of the sectorвЂ™s impressive growth, facilitate DubaiвЂ™s economic expansion and generate an estimated 22 per cent of total employment and 32 per cent of the emirateвЂ™s GDP by 2020.
Similarly in Abu Dhabi, the AED 10.8 billion Midfield Terminal Building project - a 700,000 square metre site with what is set to be the worldвЂ™s largest baggage system - remains on schedule to open by July 2017.
The UAE is expected to spend over $300 billion on infrastructure by 2030, according to a report by hospitality consultancy HVS, to include the expansion of the Dubai Metro Red line, new concourses at the recently opened Maktoum International Airport, interchanges on the Sheikh Mohammed bin Zayed road, and the construction of the main Expo 2020 centre.
Regionally, Qatar forges on with its National Development Strategy 2011-2015 through a pipeline of major infrastructure projects, including the $45 billion Lusail City project, the newly opened $17.5 billion New Doha International Airport and a high number of road, rail and associated World Cup 2022 construction projects, while Saudi Arabia is undertaking infrastructure improvement projects in roads, bridges and rail to the tune of $77 billion.
Image Credit: www.cpifinancial.net
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