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The UAE’s construction output is projected to grow by 4 percent per annum to reach $131 billion by 2029, according to Knight Frank’s 2025 UAE Construction Landscape Review.
The construction output reached $107 billion in 2024.
Construction dominates planned development across the country, accounting for 62 percent of future pipeline projects, ahead of transport (12 percent), power (7 percent) and water (5 percent).
Within this construction pipeline, mixed-use projects account for 42 percent, followed by residential real estate (28 percent), data centres (9 percent) and hospitality projects (4 percent).
As of second quarter 2025, residential construction costs ranged from AED 4,200 per square metre (sqm) for standard villas, rising to AED 11,000 per sqm for high-end villas. Construction costs for apartments ranged from AED 4,300 per sqm, climbing as high as AED 9,500 per sqm, Knight Frank said.
The cost of constructing commercial buildings ranged from AED 5,500-7,300 per sqm by the end of first half of 2025.
In Dubai, project activity is concentrated in the construction sector (75 percent). However, it accounts for only 23 percent in Abu Dhabi, with oil and gas projects leading at 40 percent.
The oil and gas sector accounts for only 3 percent of contracts awarded in Dubai.
Knight Frank expects a surge in office stock in 2027, with nearly 175,000 sqm of new office space scheduled for delivery in the capital. This follows more moderate supply additions of almost 51,000 sqm in 2025 and more than 43,000 sqm in 2026, the report said.
(Writing by P Deol; Editing by Anoop Menon)
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