• Home
• Real Estate
• News Article

Kele Contracting CEO reflects on 2011's market & looks forward to what 2012 holds

Elias: Approximately $1 trillion in planned projects in the GCC states, with KSA leading the field, followed by Iraq, Qatar, and the UAE
2011 was a year full of excitement and challenges, but while some areas of the Arab World were hard hit by social and economic changes, places such as the UAE actually benefited from the Arab spring, with tourists choosing to travel to such places for security reasons.

According to Kele Contracting CEO Andrew Elias, the UAE has always been the safe haven for people residing in the GCC region. He says that over the past year in particular, the UAE has seen consistently high occupancy rates in hotels, as well as increased traffic through its airports and shopping malls, and that families looking for a more stable living environment are choosing to buy property in the UAE.

"We are expecting many positive changes for the UAE in 2012. Demand from expats from the neighbouring Arab spring countries, especially Egypt and Syria, will be high as many are looking to the UAE as a safe place to rent or buy," says Elias. "Dubai is still an attractive place for investments, particularly in areas such as Dubai Marina, Downtown Dubai and Emirates Hills, and price growth of up to ten percent is expected in these areas next year".

However, Elias warns, in areas where there is still an oversupply decreases in prices can be expected. "Fujeirah also has a promising future, as the government is spending a lot on infrastructure, ports, residential villas and energy projects, and there are great opportunities for the private sector to develop projects such as hotels, hospitals and schools. Fujeirah will also be serving as a strategic logistics port for the UAE in years to come."

But the good outlook for 2012 is not restricted to the UAE. Elias believes that there will continue to be many investment opportunities throughout the GCC in 2012, most of which in the infrastructure and residential sectors. There is approximately 1 trillion Dollars in planned projects amongst the GCC states, with KSA leading the field, followed by Iraq, Qatar, and the UAE. According to Elias, if these projects are developed as planned the region will see steady growth and continued investment.

KSA is experiencing an urgent demand for low- and middle-income housing. "With the Kingdom's population growing rapidly - it currently stands at 27 million - there is a high demand for housing, which will encourage real estate developers to invest in new projects. The KSA government has also approved the construction of 500,000 residential units, which will also bolster the property sector," adds Elias.

He goes on to say that in addition to the housing demand there is also a shortage of hotel rooms and retail space in Jeddah, as well as an urgent need to upgrade infrastructure, particularly given the increasing number of tourists visiting the country for religious and general tourism, and for business.

As for Qatar, the country's preparations for hosting the 2022 World Cup are creating many opportunities, particularly in the hospitality, retail and infrastructure sectors as they prepare to host thousands of visitors in roughly a decade's time. "I believe we will see an increase in the number of projects being tendered for in the last quarter of 2012," says Elias.

The regional political unrest has also forced governments to assign large budgets to spend on infrastructure and housing. Elias says, "I believe that investing in those countries directly affected by the Arab Spring, such as Libya and Egypt, is not currently the best option due to political instability and security issues. Once things have settled down, and the political and economic situation has stabilised, these countries will offer plenty of opportunities, especially in terms of infrastructure projects.

Elias explains that there have also been increases to the minimum salary for nationals of these countries, as well as greater focus on reforms that enable nationals to find employment more easily. Together this increases spending, which will have a knock-on effect on the economy.

Looking beyond the region, Elias says, "With regard to global economic issues, and the Eurozone crisis in particular, I believe that the GCC will be only slightly impacted, as a large percentage of the revenue of the GCC states is derived from oil. Although there has been a decrease in demand for oil from Europe, this has been balanced by an increase in demand from the Asian market, and the price of oil is not expected to lose stability as it did following the financial crisis in 2009".

Overall, Elias paints an optimistic picture for the region for 2012 and beyond, but also a realistic one. The events of 2011 will have a lasting impact, but will not overshadow the progress and plans for the Arab World. In the long run, the investment opportunities, increased demand for housing, hotels and retail space, and the infrastructure development that is already taking place, and that is planned for the next decade, will put the region firmly on track for continued growth and development for a long time to come.

-Ends-

About Kele Contracting:
Born of an Australian heritage that spans two decades, Kele was established in the United Arab Emirates in 2005 as a joint venture between Australian firm Kele International Holdings and the UAE-based ENSHAA.

Kele's foundation was based on pre-eminent Australian construction techniques and processes. The business today operates using the same definitive construction techniques and management standards. Kele and ENSHAA took a strategic, united approach to bring Kele International Holdings' construction management and contracting expertise to Dubai's booming construction industry.

From this promising foundation, Kele combined the best construction and contracting practices of both continents and has emerged as a significant force in the Middle Eastern construction industry.

For further information, please contact:
Serine Srouji
SAHARA Communications
Tel: +971 4 3298996
Fax: +971 4 3298995
Mob: +971 50 3286188
Email: serin@saharagcc.com
www.saharagcc.com

© Press Release 2012