$75bn of projects under pressure in UAE

A number of the troubled developments are located in Dubailand, which is set to include 45 mega-projects in total

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The value of construction contracts delayed or cancelled in the UAE has hit US $75 billion (AED275 billion) according to a report released last week by HSBC Global Research.

The total is comprised of 59 individual projects, the vast majority of which are located in Dubai. Of the 59, eight have been cancelled, with the remaining 51 listed as on-hold.

The majority of the troubled projects are high-end residential and commercial developments.

Dubai has seen a dramatic rise in high-end real estate development in recent years, which is now outpacing demand which has slowed in the face of the world-wide recession.

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Rasmala Investments founder and CEO Ali Al Shihabi told Construction Week that there was a dramatic over-supply of what he terms “paper projects,” or off-plan projects.

“You must separate between the supply of paper projects, of which there is a huge supply, and the supply of existing stock,” he said.

The most valuable project in the list, obtained by CW, is the $38 billion Nakheel Harbour and Tower, which master-developer Nakheel announced last month was on hold for a year.

Second most valuable is developer Tameer’s $8.2 billion Al Salam City project, in Umm Al Quwain. There was no response on the matter from Tameer despite repeated calls.

The list includes seven Nakheel projects, delays on which have all previously been announced by the developer.

Other high-profile projects to make the list include the $3.3 billion, 6500 room Asia-Asia Hotel, the centre piece of Tatweer’s $27 billion Bawadi resort.

“No one is immune from the current economic environment,” a Tatweer spokesperson said. “Bawadi is continuing with its plans and will continue to monitor market demand. Tatweer remains fully committed to the delivery of all of its projects.”

Government projects cited in the list include Abu Dhabi’s Water and Electricity Authority’s Western Region Aluminium Smelter Power Plant, and the Government of Sharjah’s Sharjah Sports City.