Dubai - Construction activity in Dubai is expected to pick up substantially over the next few years with more than Dh350 billion worth of contracts to be awarded prior to Expo 2020.
According to figures released by BNC Network, and exclusively shared with Khaleej Times, around $97 billion (Dh356 billion) worth of contracts will be awarded in Dubai ahead of Expo 2020.
"This includes projects that have been announced and are in different stages of construction lifecycle. However, leading to Expo 2020 new projects are expected to be announced that may be awarded before the event," Avind Gidwani, CEO of BNC Network, said.
Gidwani disclosed that the expected size of infrastructure related contracts from both the public and private sector to be awarded prior to Expo is around $12.2 billion (Dh44.774 billion).
And the size of contracts to be awarded that are directly linked to Expo is estimated to be around $5.34 billion (Dh19.6 billion).
"Most project owners and developers are looking at completing their building projects before October 2020," Gidwani said. "As we move forward, we expect more road and infrastructure projects to be brought under construction for them to be completed on time."
According to Cyrus Engineer, managing director at Shapoorji Pallonji International Property Developers, the construction market sentiment is continuously improving.
"With an appreciation of the manner in which the government bodies are dealing with the current economic situation and upcoming events such as Expo 2020, we expect sizable improvement in market next year. We believe the approaching year will see considerable development in hospitality, retail and commercial sectors," Engineer said in a statement to Khaleej Times.
"There are many projects that are being appraised to support Expo 2020. It is expected that there shall be around 25 million visitors during that period. To handle such a large number of visitors, there will be a huge requirement for infrastructure development in Dubai. The government has already started investing in four main areas - public transportation and transit, accommodation, a strategically-positioned site and a highly scalable supply chain. It will not be wrong to say the momentum has already started picking up," the statement added.
Engineer sees opportunities in hospitality, infrastructure, retail, commercial, healthcare and residential sectors.
"According to Dubai Government's projections, the emirate will need to add 40,000 hotel rooms in addition to the existing inventory of slightly more than 100,000 guest rooms and hotel apartments," said Gidwani.
According to BNC Network, all the projects related to Expo 2020 site, formerly known as Dubai World Central, are being developed by Dubai World Central Corporation, popularly known as Dubai South. One of the important transport projects directly linked to Expo 2020 is the Dubai Metro Red Line expansion project worth $1.4 billion that is being developed by the Roads and Transport Authority.
Gidwani stated that year-on-year growth rate is expected to be positive for Dubai's urban construction sector leading to Expo 2020.
According to BNC's five-year moving average forecasting model, the growth rate of the value of contract awarded in urban construction is expected to reach six per cent in 2019.
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