A total number of construction contracts awarded to UAE as of the year 2018 are calculated to be worth $38.3 billion. This figure, however, only entails and refers to the contracts UAE got under the EPC, main, and infrastructure contract awards. Thus, despite being of humongous value, they are still a little lesser in their net value against $44.6 billion which was the awarded contracts value for UAE in the year 2017.
However, most developers and companies are still hopeful of bagging some more contracts in 2019, though tenders for most Expo 2020 national pavilions have already been issued. Most of the big contracts for Expo-related infrastructure projects have also been already awarded. The contracts for many of the individual pavilions have also been awarded but there remain some opportunities for interiors. It turns out these master developers are not just holding on to a vague hope when they expect of getting some more projects in the year 2019 because some in-depth research also suggests the same. According to some deep diving done by Craig Plumb, the Head of Research MENA at JLL, he arrived to the conclusion that: “There remains a large amount of projects due to complete in 2019 and 2020. Most of the tenders for these jobs have already been let but there will inevitably be more interior and other tenders. Following this large bulge in supply, the number of new announcements/launches is likely to decline as most sectors of the market are facing a potential oversupply.”
All the ongoing projects for Expo 2020 pickup pace as 2018 almost comes to an end and the mega event is just a year away now.
As per the report BNC Network issued, a total of 15,090 ‘active’ projects worth a total value of $795.4 billion are currently ongoing in UAE. Now for those of you still wondering why the word ‘active’ comes quoted, active projects in this context mean all those projects in concept, design, tender, under construction and on hold.
Reacting to this whopping figure, the potential of getting more projects in the year 2019 and drawing a contrast of the prevailing market conditions to all this news, the Managing Director of a bespoke property development entity SP International Property Developers, Cyrus Engineer was recorded stating: “Looking ahead toward Expo 2020, the International Monetary Fund has estimated the UAE’s overall growth to be 3.7 per cent in 2019. That projection is built upon the following assumptions; first being that oil price will hover around $70 per barrel, and more importantly, due to the reimposition of US sanctions on Iran, Gulf producers are increasing their output capacity. The second is that the success of the non-oil economy will continue to expand. The last assumption is that the government will continue spending on infrastructure and overall construction as Expo 2020 is around the corner. Furthermore, we expect a surge in property purchases with the adoption of the new visa laws, which will grant some residents 10-year residency permits.”
However, being an active market observer and being aware of all the functional and operational challenges that the property market currently faces, Cyrus Engineer further added: “Delayed payments followed by lack of skilled labour are the biggest hurdles contractors face globally, and it’s also very prevalent in this region. However, while the change may not be overnight, we do expect the operational challenges to improve, as more global companies see the value of doing business in the Middle East, especially as there are a number of landmark targets to be achieved.”