Smaller developers in the UAE are vulnerable to contractor delays as the recent surge in new project launches has prompted a corresponding rise in demand for construction companies, Moody’s Investor Service said in a report.
“We believe that the top tier real estate construction companies in the UAE have much of their capacity already committed to the prominent developers,” the report said.
Therefore, the smaller developers are exposed to the smaller construction companies, which may lack the expertise to complete projects on budget and within schedule.
Around 80,000 units are under construction this year in Dubai and Abu Dhabi, the report said, citing data from Reidin and JLL.
Moreover, demand for quality contractors has also increased given the ambitious development projects undertaken in Saudi Arabia, Moody’s said.
(Writing by P Deol; Editing by Anoop Menon)
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