John Ellis: initiatives
Construction markets around the world have been gathering momentum over the last 12 months, with Dubai being one of the best-performing markets globally, writes John Ellis.
According to Gulf publication Construction Week, there are currently 114 mega-sized construction projects in the design, tendering or construction stage in the United Arab Emirates, of which the majority are in Dubai, followed by Abu Dhabi – the capital of the country. In comparison, Qatar has 45 and Kuwait has 25.
This significant increase in development and construction activity is due to the continued attraction of Dubai and the Emirates from local, regional and global investors. Developers are launching new projects such as large residential communities, resorts, shopping centres, hospitals, schools, tall towers and commercial and leisure-related projects. Dubai, and the UAE in general, is seen as an attractive haven to invest in compared to some of the other countries in the region that are experiencing social unrest. The regulatory and legal framework in Dubai has also provided confidence to investors.
A recent number of new government initiatives have been announced to revive previous stalled projects and provide market confidence. These include the Tayseer Program, which aims to support certain projects in Dubai by classifying them according to pre-determined standards and assisting with the arrangement of financing with locally based banks, and the Tanmia Program, which seeks to reignite stalled projects and improve Dubai’s appeal to investors.
Developers are reporting much easier access to investment funds for the private sector, while government infrastructure projects are increasing as well at a rapid pace. This includes investment in airports, such as the new Dubai World Central Airport, the Etihad national rail network, which will be built in phases to link the principal population centres of the UAE, as well as multiple roads and highways.
Dubai is one of the best-performing markets globally
The number of tourists visiting Dubai continues to boom, with 5.5 million visiting in the first half of 2013. The Emirate has set a target of doubling tourist numbers to 20 million annually by 2020 – and this will require the number of hotels to also double. In one area alone, Mohammad Bin Rashid City, more than a hundred hotels are expected to be developed. Mohammad Bin Rashid City will incorporate the world’s largest shopping mall called Mall of the World and a Universal Studio, designed to accommodate ultimately 35 million tourists a year.
UK companies can face tough competition in the Dubai market to win business. In addition, competing companies tend to rely on the same labour pools, which are mostly labour from the Indian sub-continent. But specific opportunities exist in niche areas where UK companies are partnering with developers to be involved in future projects. One such developer is Qualsurv International, the UAE-based division of a UK project management company and a client of UK Construction Link, which is involved in developing a number of renewable energy projects in the UAE and is seeking partnerships with UK construction companies.
UK construction companies, and indeed companies in the wider built environment sector, should seriously consider Dubai and the UAE as an important market for international business. UK companies are well received in the region due to their professionalism, integrity, high quality of service, construction expertise, and reputation for adhering to construction time-frames, as well as the relative ease of raising investment finance for developments if UK companies are involved in projects.
John Ellis is Chief Executive of UK Construction Link, which helps British construction companies win business throughout the Gulf Region.
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