Construction activity in Dubai will remain robust in the next two-and-a-half years with developments related to Expo 2020 being one of the main driving force behind the sector's growth.
According to latest data issued by BNC Network, the total value of major Expo-related construction projects reached Dh156 billion ($42.5 billion) by the end of March 31, 2018, driven by both public and private sectors. The majority of these projects are poised to complete before Expo begins in October 2020, resulting in massive job creation as well. The development of Expo 2020 projects will create a low-level skyline as compared to skyscrapers dominating Northern Dubai.
In 2017, Dh11 billion worth of contracts were awarded by Expo 2020. The BNC Network data showed that the total value of the top 10 active projects linked to Expo 2020 exceeded Dh120 billion ($32.7 billion) as of March 31, 2018.
"As evident from the hectic construction activities, Expo 2020 projects have kept Dubai's construction sector busy, which has a knock-on positive impact on the overall economy. This in turn will help the economy and the consumption stable. The number of construction cranes and the workers has gone up significantly within Dubai South - where the Expo 2020 village will be located. Once completed, Dubai South and Dubai as a whole, will become another integrated, sustainable city that will have the Al Maktoum International Airport as its centre-piece," said Avin Gidwani, CEO, BNC Network.
- Bahrain Records Hottest March Ever Since 1902
- 33,000 Visitors: Bahrain Grand Prix 2018 Ends With a Bang
Rizwan Sajan, chairman, Danube Group, said Expo 2020 will be a global destination for thousands of people to come together on a common platform to share ideas, showcase innovation, encourage collaboration, which will certainly boost the UAE economy. Additionally, the UAE construction market will definitely grow on a faster pace because the Expo will play a major role as a driver of local entrepreneurial growth, while supporting the emirate's bid to become a regional start-up hub.
Nimish Makvana, partner, Crowe Horwath UAE, said construction sector is very positive considering very ambitious spending targets worth billions for new as well existing infrastructure projects.
"Preparations in the run-up to Expo 2020 are proving to be a catalyst for the UAE construction industry. UAE's construction sector sentiment is optimistic and promising as the region preparation for Expo 2020 is in full swing. The big players and businesses in construction and related industries are going to be occupied for next 24-30 months in meeting time frame and deliverables," Makvana added.
A breakdown provided by BNC Network showed that Dh63.8 billion are spent on infrastructure and transports, Dh48.4 billion on commercial and residential housing projects and Dh40.37 billion on hospitality and theme parks.
According to BNC Network, expansion of Al Maktoum International Airport Phase 1 tops Dh29.36 billion followed by Dh25 billion The Villages development at Dubai South, Dh24.2 billion Dubai Exhibition City and Dh10.6 billion Dubai Metro Red Line extension.
Imran Farooq, CEO, Samana Developers, said Expo 2020 is a game-changer for UAE's construction and is an international trade platform not only for the construction sector but almost every industry - be it real estate, hospitality, tourism, airline and related industries.
"The rising pressure from developers and their competitors has increased the speed of construction. Developers are in a hurry to complete and deliver the projects before 2020 lest the market loses its steam. UAE construction outlook is brighter with Expo as JLL's 2018 report said approximately 575,000 new real estate units could enter the market until 2020," Farooq added.
Gidwani of BNC Network pointed out that large infrastructure projects usually need anywhere between 24 to 30 months to plan and complete.
He pointed out that private developers are investing in real estate and tourism projects based on the long-term potential and their strong commitment to the economy.
"These might not be directly linked to Expo 2020. These are on-going developments that will serve the economy beyond Expo 2020."
Overall, the combined value of 11,755 construction projects in the UAE crossed Dh3 trillion in November 2017, BNC reported last year.
"Private sector contracts or developments will continue as the companies' own plans, regardless of Expo 2020. For example, major property developers Nakheel, Emaar, Dubai Properties, Deyaar, Damac, Azizi and Danube Properties will continue to invest in the local economy - that won't be directly linked to Expo 2020," Gidwani added.
By Waheed Abbas
Copyright © 2019 Khaleej Times. All Rights Reserved.