Governments providing industry with silver lining

Rakeen's Ghassan Youssef feels that construction in rak is still going strong.
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The construction industry could be on the road to recovery thanks to governments in the GCC.

After months of doom and gloom, the construction industry this week saw the first shoots of economic recovery, as many in the industry received a welcome boost.

Qatar, KSA and Abu Dhabi are leading the way, according to the latest report from Deloitte Middle East, entitled ‘The GCC Powers of Construction 2009’.

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“We have brought together expertise from Deloitte, as well as key regional players such as Arabtec and Construction Products Holding Company (CPC) to give valuable insight into the impact of the crisis on the construction sector in the region, as well as prospects for future growth and demand. The overriding message is one of many opportunities still to be found,” said Deloitte UAE audit partner and construction industry leader Cynthia Corby.

The report found that Qatar’s gas-rich revenues were being ploughed into a construction sector that is set to grow by 17% in 2009, while Abu Dhabi’s 2030 plan continued to drive strong performance.

However, Saudi Arabia is the current construction giant
with around 50% of all Gulf building developments.

“Governments are most likely to be the dominant force in breathing life into their respective countries’ construction sectors,” said Deloitte Corporate Finance construction and capital projects advisory leader Rizwan Shah.

“Of course, governments must spend wisely, create infrastructure and initiate welcoming atmospheres for both visitors and industries to operate in,” agreed Rakeen managing director Ghassan Youssef, who highlighted that construction in the emirate of Ras Al Khaimah was still going strong too.

“RAK has never been over-hyped but the Crown Prince, HH Sheikh Saud, has played a key role in encouraging business to ‘the industrial emirate’ and, therefore, we’re not reliant on speculators.”

Romain Felber, GM of RAK’s Al Hamra Village development continued, “Absolutely. All industries, in addition to tourism and property, are attracted to RAK through excellent leadership and that means that we’re not responding to a bubble, but to a real demand – an increase in industry
and production.”

So confident is Al Hamra in RAK’s continuing popularity, he revealed the developer is panning on maintaining and managing up to 30% in order to maximise the rental potential brought in by the likes of the upcoming Americas Cup.

If governments are to be key in driving economic recovery, Salem Al Moosa, chairman and CEO of the Falconcity of Wonders project, noted that Dubai would be extremely well placed to come out on top.

“What do you look for, whether an individual, investor or company? No taxes? Great transport? Facilities and amenities? Attractions? Other leading multinationals? We have all these already and the government is being very wise in scaling back development but continuing to focus on infrastructure,” said Al Moosa.

“All those people who left Dubai, will be flooding back.”