Nov 25 2013
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UAE leads GCC with USD1.38trn projects; awaits Expo 2020 win
25 November 2013
Around USD 3.45 trillion worth of projects are in the design, bid or construction stage until 2025 in the GCC, according to Zawya project tracking data compiled in November 2013. Should Dubai win the bid for Expo 2020 on November 27, the UAE market will see a flurry of big ticket projects, said industry experts polled by Zawya, who foresee double-digit growth within the emirate in 2014.
To date, UAE still retains pole position in the GCC with USD 1.38 trillion worth of ongoing projects, followed by Saudi Arabia (USD 1.02 trillion), Qatar (USD 420.12 billion), Kuwait (USD 326.55 billion), Oman (USD 189.90 billion) and Bahrain (USD 104.74 billion).
Likely to Win
"The chances of Dubai getting the Expo 2020 bid are very strong," said Bishoy Azmy, chief executive of Al Shafar General Contracting, a UAE-headquartered regional construction firm. "Dubai is well back on the road to recovery and the market is very bullish. We expect to hear a lot of positive construction announcements around the new airport and the new Dubai World Trade Centre," he said.
Another leading regional industry player from Abu Dhabi (who did not wish to be named) agreed that Dubai stood a very high likelihood to win the bid. "Everybody is waiting for the announcement, which will lead to many hotel projects becoming more viable while residential projects around the new airport will see lot of growth."
"We see a high chance of Dubai picking up the Expo 2020 bid. Following which, we will see a rise in construction activity at the new international airport in Jebel Ali, new work from the metro to the new airport, as well as access roads and highways that will be followed by projects in the surrounding areas," Dessoy said.
In June, Mattar Mohammad Al Tayer, chairman of the board and executive director of Roads and Transport Authority (RTA), had told media that it would fast-track a Dh5-billion expansion of the Dubai Metro's Red Line to connect to the Dubai World Central, if the emirate wins the bid.
GCC Construction Outlook in 2014
"In terms of construction activity, the UAE will lead the GCC in 2014. Dubai is already seeing a revival in residential projects," said Azmy who noted that in the secondary projects market, the Business Bay area leads the pack followed by Jebel Ali, projects like the Jumeirah Village on the Al Khail Road and projects around Emirates Road like the Jumeirah Golf Estate. "We also expect work from Dubailand and the new Mohammed Bin Rashid City."
"Besides, developers like Dubai Properties have started moving on its villa projects and you will see work start on the Modon project early next year," he added. He also expects work from other players like Meraas in Q1 2014 and Emaar, which plans to launch many towers in the Downtown area. Abu Dhabi will see steady growth in the coming year, he said.
"In Saudi Arabia, the major discussion is centered around the feasibility study for the Haramain rail and Jeddah metro - all billion-dollar projects. Qatar is also focusing on its metro," he added.
Nemat Shafik, deputy managing director of the International Monetary Fund (IMF), said in October that on a macro scale "growth in the GCC is forecast to pick-up to 4.1% in 2014 as oil production rises and the non-oil sector benefits from the large infrastructure projects being implemented."
Given the substantial buffers that have been built-up in recent years, fiscal policy is well positioned to respond to the challenges that may stem from the continued uncertain global environment, he added. A QNB Group report released end-October was also optimistic that the GCC countries will continue as the locomotive for growth in the Mena region.
The Abu-Dhabi-headquartered industry player said the UAE will do well in 2014 and will see work within the residential, hotels and infrastructure segments.
"We are also optimistic about the Mecca and Jeddah metro projects in Saudi Arabia. In Qatar, there are work opportunities within the infrastructure sector (water reservoirs and the Lusail Expressways) and real estate," Shafik said.
He expects Saudi and Qatar to grow between 5% and 10 % in 2014 with regards construction industry. "But Dubai will see double digit growth, especially, if it wins the bid," he added. And the international markets are also gung-ho.
According to Expobids.com, Brazil, Russia, Thailand, Turkey, and the UAE had all officially bid to host Expo 2020 by the November 2, 2011 deadline.
Thailand's bid was removed on June 11, 2013. A decision will be made at the BIE General Assembly on November 27.
The proposed Dubai Trade Centre at Jebel Ali to host the expo is a 438-hectare site and was selected due to its strategic location; equidistant between Dubai and Abu Dhabi and adjacent to the Dubai World Central airport and Jebel Ali Port, providing ease of access for the expected millions of international and local visitors.
The site master plan, which was designed by HOK, Populous and Arup, includes a photovoltaic fabric structure shading the main walkways of the project, which will capture solar energy to generate clean power, plus contribute nearly 50% of the power requirements that are needed for the expo.
"Expo 2020 will likely represent a first, no matter which city wins. If Dubai or Izmir wins, it will be the first Middle Eastern expo. Expo 2020 will be the first Russian world's fair if Ekaterinburg wins. A Sao Paulo victory would make it the first world's fair in South America and Latin America as well as the first in the western hemisphere in 34 years and the first in the southern hemisphere in 32 years," said the site which noted that Dubai is 'seemingly, the best funded of the five bids for 2020."
Two more days. The market waits with abated breath.
Sona Nambiar is Projects Editor at Zawya.com (a Thomson Reuters company). She can be contacted at firstname.lastname@example.org.
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