UAE: $1.25 trillion, the combined value of projects under construction
The combined value of current construction projects in the UAE is about $1.25 trillion (Dh4.59 trillion), figures from research conducted by Ventures Middle East reveals. “New research states that 2012 will see $15.068 billion worth of contracts awarded in the Emirates — an increase of 26.57 per cent over last year,” the research estimated.
Of the total value of current construction projects, buildings account for $871.6 billion, energy (oil and gas, petrochemicals, power and water projects) accounts for $190.9 billion and infrastructure (roads, bridges, rail, sewerage, wastewater and marine) projects amounting to $187.2 billion, said Ventures Middle East. Despite the global economic slowdown impacting UAE real estate adversely, government investments in critical national infrastructure projects have continued.
In January, Abu Dhabi said it had approved a raft of projects including the delayed construction of branches of the Louvre and Guggenheim museums, after a review of development plans. This was seen as a signal that the emirate would support its state-linked enterprises. The trend of falling prices in Dubai’s real estate sector also appears to have bottomed out.
Commenting on the country’s construction industry, Asteco Property Management’s chief executive officer Elaine Jones told Gulf News: “While the construction industry was the focus of activity in the decade of 2000, clearly the results of that era are now bearing fruit with regard to completed projects that are generating cash flow for the developers, accommodation and investment returns for those who bought.
“We constantly track the release of property whether residential, commercial, industrial or retail and can see that the various sectors dependent on the location, design and price point each have their own positive or negative points. The key now is not to generalise but appreciate the specific type and location of property for the value they represent.”
Jones added: “We are currently enjoying extremely high occupancy rates in our residential portfolio and are able to lease residential property within a reasonable period of any vacancy. Tenants are actively seeking well-managed property so as to be sure that service charges and dues are paid in a timely manner as well as the advantage of a well maintained property.
“We are aware of businesses planning to relocate here from other neighbouring countries which will have some positive impact on the excess supply of office space. We can see that funds have been released or agreements reached to facilitate the completion of various projects that were previously on hold, which will improve the concerns of investors who were waiting for their property to be handed over and for the general landscape to be cleaner and tidier.”