Dubai’s building and construction industry has never been busier

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Dubai’s Construction Industry https://www.visitdubai.com/en/business-in-dubai/why-dubai/news-and-insights/dubais-construction-industry 20170821T091533 20180426T153720:636603538400025414 News & Insights Dubai’s preparations for hosting Expo 2020, coupled with its Smart City initiatives, make the emirate the focal point of the Gulf’s construction sector. The building business has never been busier, with a pipeline of technology-inspired projects creating a smorgasbord of excellent opportunities for local and international contractors. These will help meet demand for housing from a population forecast to grow at 3.5 per cent annually. Around 11 billion dirhams of Expo-related contracts will likely be announced in 2017 alone. Dubai’s building and construction sectors, and related industries, have never been busier.

Preparations for hosting Expo 2020 Dubai, coupled with Smart City initiatives, make the emirate the focal point of the Gulf’s construction sector.


Building activity in Dubai has never been busier, with a pipeline of technology-inspired projects creating a diverse range of excellent opportunities for local and international contractors.


The residential property market - the most sophisticated in the Middle East and an established magnet for international investors, has about 78,000 individual units under construction and scheduled for completion by 2020, real estate analyst JLL estimates. These will help meet demand for housing from a population forecast to grow at 3.5 per cent annually.

Around AED11 billion (US$3 billion) of Expo-related contracts will likely be announced in 2017 alone, consultancy firm Cluttons forecasts, while market research from BNC Project Intelligence suggests Dubai’s transportation sector alone has around US$32 billion of projects underway. Furthermore, the emirate’s construction sector is proving resilient despite sustained low oil prices slowing some Gulf economies.


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A positive outlook remains



“We're quite positive about where the industry is heading, both in its growth prospects and in terms of future developments,” said Ciaran McCormack, Regional Director of Linesight, a construction industry strategy firm.


“There's a greater degree of positivity in the market with Dubai proving to be the more robust and stable market within the GCC at this time.


“There's a willingness there to adopt the best practices and best procedures, and to be a global leader in this regard. That's something Dubai has done very well in the past. There are notable drives toward sustainability, which are government-led initiatives.”


Sustainable practices include choosing building materials with low-carbon emissions, examining the process of manufacturing these materials and where they are being sourced. These considerations all impact the carbon footprint of a project. Instead of hauling materials from thousands of miles away, could they be sourced locally?


“Build-to-own developers are starting to become more focused on this area, but while low prices of power and water continue, this isn't something [that] is massively prevalent,” said David Clifton, Faithful+Gould’s regional development director. “Having said that, subsidies on power and water - as well as fuel - are being released gradually across the region and this will in the midterm refocus attitudes in the market.”


Identifying shortcomings in productivity

Linesight’s McCormack highlights a greater focus on how the sector can be more efficient as well as finding more productive means to construct buildings.


Clients and investors still prioritise rental yields, but technological advances mean superior returns - when considered over a longer timeframe - can be achieved by using sustainable solutions, even if the initial costs may be higher.


“There is a shift from thinking about the initial capital as a standalone cost,” said McCormack. “From our experience, there is a growing acceptance that the total cost of the product over its lifespan should be the determining factor.”


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Sustainability will be among the key subjects debated at The Big 5, the largest construction event in the Middle East, to be hosted in Dubai from 26-29 November. Last year’s show welcomed nearly 2,600 exhibitors and 79,000 participants.


Development in Dubai is largely based around the government’s Smart City initiative, which aims to build a smart and sustainable city through infrastructure investments in transportation, ICT networks and energy management. It includes over 540 “smart” schemes, such as the futuristic 3D-printing of building materials, a technology Dubai has set its sights on being a leader in.


For the construction sector, including interior design, facades, curtains, mechanical engineering and plumbing (MEP), components could all be made through 3D printing, said Faithful+Gould’s Clifton.


“3D printing is still in the concept stage when it comes to large-scale implementation in the construction industry in the Middle East, but, whenever 3D printing becomes viable, it will come first to the UAE,” added Avin Gidwani, chief executive of BNC Network.


“We will in all probability see 3-D printing used for components of buildings in the short term. Commercial construction of complete 3D printed buildings is still a few years away. The industry perceives the technology neither as a foe or a fad, but as a friend which may help in decreasing the workload of construction workers and shorten the construction cycle.”



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English Dubai Corporation of Tourism & Commerce Marketing

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