GCC construction projects in 2013 hit $69.91bn
Ventures ME study predicts 2014 work to total $83.41bn
Construction projects across all building sectors worth $69.91bn were completed in the GCC in 2013, according to a study conducted by Ventures ME and commissioned by dmg events.
The research also looks into 2014 and estimates projects totalling $83.41bn (+17.43%) to be completed and $82.2bn to be awarded across the year.
The study revealed that, with residential (43.3%), commercial (18.2%) and educational (10%) segments leading the way, 2013 has been a positive year for the construction market - $69.91bn worth of projects were completed with a further $71bn worth of projects awarded. Hospitality, medical and retail buildings were also completed – with total values of $4.6bn, $2.4bn and $1.8bn respectively.
KSA and the UAE rank in the top two positions for all sectors with the exception of education and healthcare for which Qatar ranks top with completed projects worth $4.6bn in the educational segment (KSA: $1.01bn; UAE: $714m) and worth $1.12bn in the healthcare segment (KSA: $482m; UAE: $570m).
The value of the GCC interior contracting and fit-out market in 2013 was $7.81bn – an increase of 8% when compared to 2012. KSA was the largest market with a 47.4% share ($3.7bn) followed by the UAE and Qatar valued at $2.39bn and $953m respectively.
The residential sector accounted for almost half of the overall 2013 market with a market share of 42.6% ($3.33bn). The commercial sector followed with a 17.9% share corresponding to a value of $1.40bn and the hospitality sector with 13.4% share and a value of $1.05bn.
Commenting on the figures, Frederique Maurell, group event director for INDEX and workspace at INDEX, said: “Most segments of the GCC building construction market have recovered significantly from the downturn and 2013 has been positive with residential, education and hospitality segments in particular showing signs of growth and a strong recovery.”
According to the Ventures ME study, figures for 2014 are expected to increase further for both the building construction and interiors markets - $83.41bn worth of completed projects and $82.8bn worth of awarded projects are forecasted over the next 12 months. The interiors market is also likely to grow by 18% and reach an estimated value of $9.2bn by the end of the year.
The healthcare sector is expected to grow by 250% from a value of $2.4bn registered in 2013, to an estimated value of $8.4bn. The UAE, in particular, will be the country with the majority of healthcare buildings completed worth a total value of $3.19bn - almost five times the value registered in 2013 - followed by KSA with $3.09bn and Qatar $1.7bn. Kuwait was also highlighted with the value of projects completed moving from $47m in 2013 to an estimated $317m in 2014.
Despite the huge increase in the healthcare sector, the building construction market will still be led by the residential and commercial sectors that together will account for over half of the market share concentrated, particularly in KSA, the UAE and Qatar.
Out of an overall estimated market value of $9.2bn, the residential sector will account for 35.9% and $3.33bn in value, followed by the hospitality sector at 19.8% and $1.82bn of value and the commercial sector with 15.7% and $ 1.44bn in value.
When compared to 2013 figures, the healthcare sector will see the biggest growth with a huge 256% increase, reaching a value of $ 672m. The retail interiors market is expected to see the biggest drop in value from $393m to $308m.
Maurel added: “The GCC interior contracting and fit outs sector constitutes approximately 10 to 20% of the average construction project value, performing much better than its European and Asian counterparts. Worldwide market slowdowns have prompted investors to seek markets that offer growth prospects in the near term and the GCC offers ample growth prospects for the interiors and fit outs market across 2014."