The UAE construction sector will prosper beyond 2020

According to a report, the construction industry in the United Arab Emirates will prosper in the post-Expo 2020 period due to new initiatives launched by the government, rising oil prices and investor confidence in the economy. 39; economy.

Research and Market, the largest Dublin-based market research firm, said in its latest report that an increase in crude oil production and the government's efforts to diversify the economy should boost investment in the sector United Arab Emirates construction over the next five years. The industry, which recovered last year after two years of contraction, is expected to grow at a compound annual growth rate of 4.64% in 2019-2023, compared to 1.08% in 2014-2018. It is expected to reach $ 101.2 billion in 2023 versus $ 80.7 billion in 2018 as a result of the recovery in crude oil prices, higher non-oil exports and a reduction in the budget deficit. It grew 4.2% last year.

The report titled "Construction in the UAE – Key Trends and Opportunities for 2023" indicates that new investments are expected in residential construction, energy and utilities, infrastructure and infrastructure projects. of commercial buildings.

Referring to various government initiatives such as the 2017-201 strategic plan of the Ministry of Education, the 2030 National Strategy for Higher Education and the 2020 Education Strategy, the 2050 Energy Strategy, the Sheikh Housing Program Zayed and Dubai's tourism strategy, the report indicates that the construction industry has a promising prospect.

A spokesman for Emaar Properties said that the positive growth of the economy, driven by the record performance of the aviation, hospitality, retail and hospitality sectors. Financial services in Dubai, as well as the strong return on investment will continue to boost the real estate sector.

"Infrastructure spending for Expo 2020 in Dubai also serves as a catalyst, boosting investor confidence," the spokesman said.

Rizwan Sajan, founding chairman of the Danube Group, said the construction sector would continue to perform well in the UAE due to a number of factors.

First, he said that the price of oil plays a role in public investment. The current price of oil, which is around $ 70, will help increase investment in the economies of the GCC countries.

Secondly, the new projects announced by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Sovereign of Dubai, will occupy the sector in addition to mega projects underway, such as South Dubai, Dubai Hills Estate, Shindagha Corridor, Union Railway, Deira Islands, etc.

"So, there will be no shortage in construction activities," Sajan said.

Residential construction leads

A report from Research and Market noted that residential construction was the largest market in the construction industry in the United Arab Emirates in 2014-18, accounting for 33.1% of the total value of the building. industry in 2018. The market is expected to maintain its position over the next five years through government efforts to balance demand and supply of housing through housing construction.

Data from the BNC Projects Journal revealed that more than 15,000 projects worth $ 791 billion are at various stages in the United Arab Emirates. It included about $ 202.8 billion of projects in the design, design and tender phase, positioning the UAE with the second largest pipeline of projects after the $ 827.4 billion pipeline. dollars from Saudi Arabia.

"Given the positive trend of recovery in oil prices, the diversification of the economy, the strong liquidity of Abu Dhabi and the long-term health of our real estate market, we are optimistic for the coming year, "said Maan Al Awlaqi, senior manager – commercial at Aldar Properties.

"The real estate climate in the UAE is becoming increasingly positive as the region prepares for Expo 2020 and we hope to see this have a positive impact on nearby real estate projects such as our own Alghadeer community. ", he added.

Investment in energy, utilities

The energy construction and utilities sector was the second largest contributor to the UAE construction sector in 2014-18, accounting for 26.7% of the total value of the sector in 2018. It should follow a similar trend over the next five years, as the government will invest 600 billion dirhams in the development of renewable energy projects in the country by 2050.

Al Awlaqi of Aldar Properties said initiatives such as Ghadan 21, the petrochemical city of Adnoc, are maintaining foreign direct investment in Kizad and that the future Yof Island campus on Yos, which will attract 10,000 employees, will boost the Demand for mid-market projects such as Water's Edge. . "We are also optimistic about tourism, benefiting from an annual growth composed of about two figures, which will be fueled by the 500 million dirhams allocated to the sector under the aforementioned stimulus program" Ghadan 21 " ", did he declare.

The spokesman for Emaar Properties echoed similar views and said the sector had promising prospects. "Our outlook for the real estate sector is robust, underpinned by the outstanding performance of our real estate sector in 2018," the spokesman said.

Atif Rahman, director and partner of Danube Properties, said the construction sector would continue to flourish in the UAE due to several factors.

"The main reason is that the government remains committed and focused on infrastructure expansion, which has always boosted the sector significantly, leading to almost endless momentum," he said.

He said the Dubai development pipeline is long and the current mega projects have enough work for the next decade.

"In addition, economic diversification and industrial development efforts will further add to construction projects.There are still many surprises ahead of the government as the country grows.Behold Dubai will remain a hub of construction and development for years to come as it continues to attract investment, "he said.

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