More of the same? What does 2013 hold for Middle East construction industry?

More of the same? What does 2013 hold for Middle East construction industry?
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Published January 20th, 2013 - 08:08 GMT via SyndiGate.info

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Experts predict $4.3 trillion worth of construction projects across the Mena region over the next decade
Experts predict $4.3 trillion worth of construction projects across the Mena region over the next decade
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Alabbar Energy
,
Sustainability Group

The Middle East has often been criticised for its excessive consumption of resources as was confirmed by a 2012 Living Planet Report, which named Qatar, Kuwait and the UAE as the top three countries having the largest per capita ecological footprints in the world.

The situation is ripe for change and developers across the region are now giving serious thought to the impact of sustainability and green construction concepts on their profits and cost savings targets. After steady growth through 2012, the Middle East construction market looks set to once again regain the momentum of the pre-recession era. Countries across the Middle East, particularly Saudi Arabia, Qatar and the UAE, have announced plans for major development undertakings. Experts predict $4.3 trillion worth of construction projects across the Mena region over the next decade, representing a growth of 20 per cent through 2020.

Now taking centre stage in discussions within the industry is the issue of sustainable construction. As far as new projects are concerned, there is still a lot of work that needs to be done in translating good sustainable designs into sustainable buildings. For a number of projects in the region, lack of quality control in construction or poor commissioning have resulted in great intentions on paper not transpiring into reality. With regard to the existing building stock, whilst an increasing number of facility and building owners are looking to manage their energy and water consumption more effectively, this only accounts for a fraction of the existing building stock in the region.

Commercial and residential projects to strive for high levels of sustainability

While sustainability has been a buzz word in the industry for a number of years, we are now definitely witnessing a genuine drive of new development projects in pursuing increasingly higher levels of sustainability. This is driven partly by regulation but also due to developers realising that sustainability offers a genuine opportunity to increase the value of their assets and also ensure that their assets are future-proofed. Commercial as well as private buildings will begin to incorporate green design elements in their construction in order to limit the amount of damage they do to the environment as well as to be as energy efficient as possible.

Continued growth in public sector projects

Throughout the region there is a commitment from governments to invest in social and commercial infrastructure. In order to increase the financial efficiency of these projects both during construction and operation, government agencies are increasingly turning to sustainability and energy efficiency as a means of reducing the lifecycle costs of these buildings.

AESG (Alabbar Energy and Sustainability Group) has been working closely with a number of public sector clients on projects that include major ports, airports, schools and government buildings. The results of these efforts have led to reductions in government spending on utility bills and infrastructure which ultimately translates to freed up revenue for more ‘constructive’ purposes. As massive infrastructure projects are due to get under way during 2013, developers will be keen to look at innovative means to reduce the energy impact of these construction both during construction as well as operational phases.

Commissioning will be viewed with greater importance

Traditionally in the Middle East, commissioning of buildings has not been carried out effectively, which has resulted in many buildings performing poorly during operation and therefore requiring frequent maintenance.Judging by the feedback through 2012 however, we are likely to see an increasing number of developers choosing to utilise commissioning agents on projects to ensure a more effective transition between design, construction and operation stages of projects. 

Commissioning agents will be increasingly called upon to identify potential savings in capital costs for clients by better optimising designs and streamlining the testing and commissioning process, such that building owners receive a better functioning building at the start of operation.

Increase in energy retrofit projects

Due to recent increases in utility tariff’s, the economic downturn and a greater focus on energy and sustainability issues, facility owners and operators are paying greater attention to their utility bills. Conducting detailed energy audits of facilities has shown that buildings can save approximately 20 per cent of their energy bill through low to no cost measures alone, that all pay back within 12 to 18 months with an Internal Rate of Return (IRR) upwards of 40 per cent. As far as investment decisions go this is a no-brainer and during 2013, building owners are likely to realise this and take measures to reduce their energy consumption.

While these trends only scratch the surface of green building, they are indicative of the positive direction in which the industry is heading. 2013 looks poised to be a year for massive growth of the green building market and the onus is now upon facility owners and managers, and architects and design teams to ‘think green’ lest they find themselves in the red.

The writer is a director at Alabbar Energy and Sustainability Group, a leading energy and sustainability consultancy in the Middle East. Views expressed are his own and do not reflect the newspaper’s policy.

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