Value Of GCC Construction Projects To Jump 92% In 2014 – Study

Construction projects worth $128.46 billion across the GCC are expected to be completed by the end of this year, according to a study.

The amount indicates a 92 per cent year-on-year increase in value as per the bi-annual study conducted by Ventures ME. The study  analyses the building construction market in six main sectors in the GCC including residential, commercial, hospitality, retail, educational, and medical.

2014 Forecast for GCC Building Construction Market

Out of a total market worth of $128 billion, the medical, residential and hospitality sectors will count for over half of the market with shares of 24 per cent, 23 per cent and 22 per cent respectively. The three sectors leading the way will be followed by the commercial (12.5 per cent), educational (5.9 per cent) and retail (one per cent) sectors.

The hospitality and medical sectors will register the biggest growth with the value of completed hospitality projects forecasted to increase from $3  billion in 2013 to $29 billion. The value of completed buildings for medical use will rise 25 per cent to a value of $31.38 billion.

The United Arab Emirates will be at the high end of the rank when it comes to its healthcare sector; out of a total market forecasted to value $31.38 billion, the UAE will account for $3.13 billion – a significant increase from the 2013 figure of $227 million.

KSA will be where most of the completed projects will be located particularly in the residential ($34.39 billion), hospitality ($3.85 billion), commercial ($7.97 billion) and educational ($4.38 billion) sectors.

Qatar will register retail projects to be completed for a total value of $522 million, moving up in the country’s ranking from the fifth position in 2013 to the first.

Resumed Construction Projects

Construction work has resumed over the last 18 months on stalled real estate projects  worth $12 billion, according to a MEED Projects report.

The pace of construction work has picked up since Dubai’s successful Expo win last year, the company said in a statement.

Projects worth more than $23 billion were awarded in the construction sector last year, 55 per cent of which were for mixed use or residential developments. The UAE saw the highest number of project awards in 2013 after 2008, MEED said.

“2013 showed some of the most promising growth in the construction sector since 2010, with especially strong figures in the residential and mixed-use sector of the industry,” said Julian Herbert, director of MEED Projects.

“This is a positive sign of increased investment in the UAE’s economy, both from developers and from property investors – the large number of residential project awards alone demonstrates that there is a rising demand for such buildings, indicative of a growing population.

“The UAE is well on track to returning to the levels of investment last seen in 2008, with 2014 expected to be even better.”