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In focus: the growing role of GCC cost consultants

by Jochebed Menon on Nov 19, 2016

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Progress on some GCC projects may have stalled during the past couple of years, owing to the low oil price, but the region’s retail, hospitality, and tourism sectors have continued to grow. As countries like the UAE and Qatar move ever closer to deadlines connected to events like Expo 2020 and the 2022 FIFA World Cup, construction outfits are witnessing the emergence of fresh opportunities.

According to the UK-based construction and property consultant, Thomas & Adamson, there are currently $350bn (AED1.28tn) worth of active construction projects in the UAE. Industry experts say that the cost consultancy market is currently growing at a good pace, in tandem with region’s construction industry.

Donal O’Leary, commercial services director of Faithful+Gould, feels that while public sector spending has reduced across the region due to low oil prices, the private sector’s need for cost consultancy has increased.

He says: “Private sector opportunities have actually risen in some areas, whereas bidding options have remained consistent. However, the current liquidity issues have hampered or delayed project appointments and delivery.”

For Zander Muego, director at Thomas & Adamson, the firm has not seen any direct correlation between the price of oil and demand for its services.

He says: “The UAE, fortunately, has the most diversified economy in the GCC. An active construction market, an expanding manufacturing base, and a thriving services sector are further helping the UAE diversify its economy.

“At the start of 2016, the marketplace, in general, was more subdued; this was partially driven by low oil prices and other macro-economic factors,” he adds. “Through 2016, we have seen an upturn in demand; this has been driven by an increase in new construction projects having commenced as opposed to a specific change in demand for cost consultancy services.”

As the market becomes more educated, developers in the region are realising the need to cut costs and find the most efficient ways to complete projects. For Clive de Villiers, managing director of C-Quest, “the demand for reliable cost advice has increased, as clients become more conscious of budgets and the need for controlling costs”.

Tech-savvy developers are realising the benefits cost consultants bring to the table, and this understanding is boosting the industry. Demand for independent cost consultants is on the rise as regional construction activity grows.

Muego adds: “We expect to see a general trend of increasing activity in the construction sector. If supported by the ongoing education of the market and recognition of the benefits that independently appointed cost consultants bring to cost-savvy developers, it will lead to a steady increase in cost consultancy service provisions. Having said that, the barriers for entry in our sector are relatively low and we expect to see increased competition from start-up entities, as we have seen over the past few years.”

While the market embarks on the path to increasingly acquire cost consultancy services, experts see a high demand from the residential, retail, and hospitality sectors.