Saudi Arabia and the UAE jointly account for more than $2 trillion worth of unawarded construction projects in the MENA region, according to JLL’s latest UAE Construction Market Intelligence Report.

Within the MENA pipeline valued at $3.9 trillion, the UAE accounts for $590 billion, with residential projects comprising $125 billion and mixed-use projects totaling $232 billion (39%), the report said, citing MEED data.

In comparison, Saudi Arabia holds a significant share of $1.5 trillion, representing 39% of the total MENA pipeline value.

Despite prevailing global challenges such as persistent inflation, elevated interest rates, and geopolitical tensions, the construction market in the MENA region remains robust.

In the UAE, particularly in Dubai, the real estate sector is witnessing significant growth, with a 21% year-on-year surge in both sales and rental prices.

The emirate delivered around 10,000 residential units in Q1 2024, with an additional 25,000 units scheduled for completion by year-end. Abu Dhabi is also experiencing growth, with around 1,600 units delivered in Q1 and 6,000 more expected by the end of 2024, taking the total stock to 294,000.

Dubai added 2,000 hotel rooms in Q1 2024, with another 5,000 expected this year, totaling 160,000 keys. Abu Dhabi plans to add nearly 500 rooms to its inventory, bringing its stock to 34,000.

JLL maintains a positive outlook for the UAE’s construction market, which nearly tripled the value of awarded projects in 2023 compared to the previous year.

Laura Morgan, Market Intelligence Lead MEA, Project & Development Services, JLL, said the UAE construction market shows a consistent upward trend thanks to the resilience and promising growth prospects across all sectors.

Although the upward trajectory of land and construction costs remain a key challenge in 2024, the strong uptake of new projects will ease the pressure and maintain the sector’s growth momentum through the year, she added.

JLL said that material availability is currently stable and expects improvements in local manufacturing capabilities in the medium to long term.

(Editing by Brinda Darasha;