The total value of 21,893 active construction projects in the GCC surged to Dh8.8 trillion at the beginning of September 2017
Unfazed by the challenging global economic situation, the total value of 21,893 active construction projects in the GCC surged to Dh8.8 trillion at the beginning of September 2017 – higher than the gross domestic product of 205 countries, according to a leading project research and intelligence provider.
While a bulk of the new project launches has been in the UAE, the number of active projects in the GCC increased in August by two per cent as compared to July 2017 and the total estimated value of these projects increased by one per cent, BNC Network said in a research report.
“The trend is a reflection of the ground realities of the GCC economy – and shows that the Gulf countries are investing their wealth more carefully and intelligently to build a brighter future and more sustainable economies,” Avin Gidwani, chief executive officer of BNC Network, said.
In the UAE alone, over the last few days, a number of new projects has been announced, including a Dh24 billion mixed-use master-planned project in Sharjah, in addition to a Dh3 billion new neighbourhood near the University City at Juraina in Sharjah as well as a Dh1.5 billion tower to be managed by Shuaa Capital, said Gidwani.
Recently, sl Asset Management Group announced Wasl 1 – a new mixed-use freehold community next to Dubai World Trade Centre – that expands the freehold areas into the traditional downtown of Dubai.
The total value of urban construction projects in the GCC reached Dh4.34 trillion in September 2017, BNC Construction Intelligence report shows. This reflects the buoyancy of the project market and the fact that the governments of the six Gulf countries are determined to carry out the important infrastructure projects, BNC said.
The urban construction contracts constitute 80 per cent of the contracts awarded for all sectors in GCC and in dollar terms this translates to 49 per cent of the total contracts awarded.
“The governments and the private sector developers of the GCC region appears to be unmoved by the slowdown in the global economy and the lower oil price environment. Our latest GCC Construction Intelligence report shows that the projects are going ahead despite the challenging global economic situation,” said Gidwani.
“This is very good news for the businesses considering the overall global economy where countries are trying to push the economic growth rate to a slightly higher level,” he said.
These projects worth Dh8.8 trillion will keep many businesses, especially the sub-contractors, suppliers remain in business and help save millions of jobs across the region. “If these projects continue as planned, the region will not only be saved from a possible recession and job losses, but also these will ensure stronger economic growth across the region,” said Gidwani.
The GCC constitutes 85 per cent of all active projects in the Mena and in dollar terms, these projects account for 68 per cent of the total estimated value.
Released on the eve of the Cityscape Global exhibition that takes place at Dubai World Trade Centre from September 11-13, the BNC report said the property show is expected to see a flurry of new project announcements.
“Over the last few days, we have seen a number of new projects being announced, including a Dh24 billion mixed-use master-planned project in Sharjah, in addition to a Dh3 billion new neighbourhood near the University City at Juraina in Sharjah as well as a Dh1.5 billion tower to be managed by Shuaa Capital,” Avin Gidwani says.
“These are exciting times for all those living in the GCC and the UAE – where most of the economic development activities are happening and we are passing through an exciting time.”
Value of the oil and gas projects in the region has reached Dh1.21 trillion, while the total value of utility project in the Gulf reached Dh1.1 trillion in September 2017, the report shows. Total value of industrial projects reached Dh666.47 billion.
“Events like Dubai Expo 2020 along with stabilisation of the oil price and the drive of the various GCC countries to achieve economic diversification and increase in the living standards will play a vital role in the construction industry contract awards,” Gidwani says.
“As the economic growth is expected to pick up pace next year, we expect an increased construction activity across the board in 2018. New project announcements by major developers that have taken place from 2016 till now – will go into tender next year and trigger increased construction activities across the GCC,” said Gidwani.
In August, a total of 142 active projects with a combined estimated value of $14 billion moved to construction stage. The largest project to be awarded in August was Phase 1 of Duqm Oil Refinery located in Oman worth $2.75 billion.
Also in August, 596 active projects with a combined estimated value of $13 billion were completed. The largest project to be completed in August was the Presidential Palace project located in Abu Dhabi.
However, 90 active projects with a combined estimated value of $15.6 billion were put on hold in the GCC. The largest project to be put on hold was Section 1 of Phase 1 of Makkah Mass Rail Transit System located in Makkah, Saudi Arabia
BNC, the largest project intelligence provider in the Mena region, tracks 25,324 live construction projects with a value Dh26.4 trillion.
All rights reserved to the initial publisher for Khaleej Times.
Collected and published by Arms &McGregor International Realty® editorial team. Get in touched with us at [email protected]