The new year has brought new goals for Middle East construction
Changes are afoot throughout the Middle East’s construction industry as the new year brings with it new goals and resources, as well as challenges
The late David Bowie, in his 1971 hit song, Changes, sang about the inevitability of newness and evolution – and the impossibility of ever fully grasping either. That said, I think some of us in the Middle East’s construction industry would, in fact, be able to – in the words of Bowie – “trace time”.
As you may have noticed, after almost three years of impeccable work, James Morgan has left Construction Week, and I am the magazine’s new editor. While James’s power-packed puns, site visits, and test drives, will be missed by us all, regular readers of Construction Week will agree that this is only one of the many changes they are likely to be faced with this year.
Indeed, the start of 2018 has reiterated the significance of the many countdowns ticking away in the Gulf’s construction sector. The UAE Vision 2021 and the Saudi Vision 2030 programmes are both a year closer to their respective realisations, and while Expo 2020 Dubai may be two years away, the realities of its needs will strike home much sooner. For the readers of this magazine, these timelines mean good news, even if they are somewhat overwhelming as well.
As recently as 2015, two of the Gulf’s largest construction markets – the UAE and Saudi Arabia – were each facing a set of diverse, unprecedented challenges due to market externalities. For instance, even as the UAE’s property sector “exceeded expectations” in Q2 2015 – owing largely to its economic diversification investments – notable price corrections were anticipated across the country during the year, a report by Tasweek revealed.
Meanwhile, in June 2015, Husain Al-Zahrani, acting manager of the Makkah region’s housing department, revealed that public-private partnerships (PPPs) – an essential part of the modern construction kitty – were yet to be optimised in the kingdom’s residential sector, according to Saudi Gazette.
But times have changed, and the last 24 months have seen slow but definite advancements in the Gulf’s construction community. For example, investment consultancy JLL revealed this month that Dubai’s premium office space is likely to witness increased demand this year. Similarly, Saudi Arabia has the highest value of PPPs in the Gulf, a report by JLL and DLA Piper revealed in November 2017. At that time, the country’s PPP sector was said to have attracted investments worth $42.9bn (SAR160.9bn).
Alternative financing instruments, such as real estate investment trusts (REITs), are also gaining traction in the kingdom. Up to 10 new REITs were expected to be launched in Saudi by the end of last year, Stephen Flanagan, a partner at Knight Frank in the region, told Construction Week in August 2017.
These changes have been slow to come, and have often come about quietly, but their impact is evidenced by the 22,680 projects – worth $2.43tn – currently active in the GCC. In the months to come, my team and I will cover many more evolving trends and project schemes in Gulf construction, so please get in touch if you have an exciting or inspiring story to tell. After all, a lot might be changing around us, but the Construction Week staff will never refuse an adrenaline fuelled site visit.