30/12/2012 15:02 AST
After going through a slowdown during the global financial crisis in 2008 and with the current recovery in GCC economies, the UAE construction industry is projected to exhibit sustainable growth prospects in the next few years, according to a recent Dubai Chamber of Commerce and Industry study.
Construction as a percentage of GDP of the UAE reached 10.6 per cent in 2008 and 10.3 per cent in 2011 while for 2015 and 2021 the sector’s contribution as a percentage of UAE GDP is projected to record 11.1 per cent and 11.5 per cent respectively.
According to the International Monetary Fund (IMF), the population of UAE is expected to reach six million by 2015 from 5.4 million in 2010. The increase in expatriate population, which accounts for more than 80 per cent of the country’s population, constitute the main growth drivers for increasing demand for residential and commercial property units in the country.
The growth in real GDP is projected by the IMF to reach 4.4 per cent in 2015 from 3.3 per cent in 2011, signifying a revival of the overall economy which augurs well for the construction industry, says the study.
In 2011, the UAE recorded the highest construction project value, reaching $319.1 billion, accounting for 51.1 per cent of the total construction project value in top 100 projects in the GCC region.
Indicative of the above statement is the list of the key construction projects both commercial and residential.
The UAE was followed by Saudi Arabia at $218.9 billion (accounting 35 per cent of the total construction project value). Qatar accounted for 8.9 per cent of the total construction project value followed by Oman and Kuwait accounting for 3.2 per cent and 1.8 per cent of the top 100 projects respectively.
According to Meed Projects, there were 46 construction projects (in oil and gas, real estate, infrastructure, transport and petrochemicals) recorded across the GCC region in 2011. The total value of these projects reached USD $billion last year compared to $756 billion in 2010.
In its quest to become an international investment hub, the UAE has pushed forward major construction projects in infrastructure and residential/non-residential segments. Extraordinary growth in transport infrastructure has been observed, especially in projects such as the $7.8 billion expansion of Dubai International Airport, and the $6.8 billion Abu Dhabi International Airport re-development project.
According to Business Monitor International, the majority of projects in the UAE's construction industry involve 38 per cent of the total projects to be finalised in energy and utilities, 31 per cent in construction, 29 per cent in transport and 2 per cent in social infrastructure.
The study informs that favourable government policies, such as permitting non-UAE/GCC national freeholds and leaseholds in designated areas of the UAE, will attract foreign direct investment (FDI) in construction as an increasing number of foreigners will focus on acquiring properties across the country.
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