Report: Qatar leads in global built-asset returns

The Arcadis ‘2016 Global Built Asset Performance Index’, puts Qatar as the country with the highest built-asset returns on a per capita basis, with an average of $66,300 (QAR241,000).

By 2026 the total return from built assets is projected to rise by 20% to $183bn.
By 2026 the total return from built assets is projected to rise by 20% to $183bn.

Qatar leads the way globally when it comes to securing a financial return from its built assets, when assessed on a per-capita basis.

Based on the latest findings by the project consultancy Arcadis, ‘2016 Global Built Asset Performance Index’, both the US and China are ahead when it comes to making the most out of their built-assets.

While the giants lead globally, within the Middle East Saudi Arabia and the UAE are placed 22nd and 24th respectively.

China’s value gains in the period 2014-16 were about 12% and valued at an astounding $10.4tn (QAR38tn) up from $9.3tn (QAR34tn).

Up 4% from $5.2tn (QAR19tn) to $5.4tn (QAR19,7tn) the US was placed second.

If as expected, President-elect Trump goes ahead with a major infrastructure spending programme, the US will be hoping to close the gap with China.

Coming out top in the Middle East is Saudi Arabia, which has seen a 47% increase to $364bn (QAR1.3tn) from $248bn (QAR901bn).

Next up is Egypt with 2016 value of $357bn (approx QAR1,2tn) and then the UAE which was up 16% from the 2014 level of $302bn (QAR1bn) to $351bn (QAR1.2tn).

However the country with the highest built-asset returns on a per capita basis, is Qatar with an average of $66,300 (QAR241,000).

Investment in buildings and infrastructure is playing a key role in supporting Qatar’s economic diversification agenda, according to Arcadis, putting Qatar ahead of the UAE.

It is estimated that in 2016 built assets will deliver $152bn (QAR553bn) to the Qatar economy, representing an 11% increase over the last two years.

This will see the total contribution from built assets accounting for 44% of Qatar’s total GDP in 2016.

This growth in percentage is in part owing to the impact of a lower oil price, which has seen a decrease in the percentage of revenue that comes from exporting natural resources.

However, it is also an indication of the progress that Qatar has made in recent years in its diversification drive into new industry sectors.

Derek Sprackett, head of Business Advisory, Arcadis Middle East said: “Built assets, including transport links, high quality residential and commercial property, and productive industrial centres all make a significant contribution to a country’s economic performance.

“In recent years, many countries across the Middle East have invested heavily and strategically in real estate and infrastructure, as part of their national visions and efforts to diversify their economies.

“Our research shows this strategy is already paying financial dividends, as well as creating cities and communities where people want to live, work and visit.”

When assessed on a per-capita basis, Qatar leads globally when it comes to securing a financial return from its built assets.

In 2016, built assets will generate an average of $66,316 (QAR241,000) for every person that lives in Qatar.

This figure demonstrates that Qatar has not only invested in its built environment, but it is also securing an impressive return on this capital spend, and is significantly higher than any of the other 35 countries considered in this year’s study.

Included in the study was how the economic return from built assets would evolve over the next decade.

For Qatar, the study showed that the revenue that comes from built assets would increase by 20% in this period, reaching a total of $183bn (QAR666bn) by 2026.

“Vision 2030 has provided an inspiring roadmap on how Qatar will develop over the coming years. Since its inception in 2008, a significant amount of progress has been made however the drop in oil price has resulted in a very different economic environment. A smaller number of programmes have rightly been prioritised but the mechanics that support the delivery process also need to become more efficient.

“This includes the speed at which projects are procured, tenders assessed, and schemes ultimately started. This is particularly important for projects relating to the 2022 FIFA World Cup™, which is a key milestone in the overall vision but which has a much earlier delivery date,” added Sprackett.

You can view the full findings from the 2016 Global Built Asset Performance Index here:

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