David Griffiths, Real Estate Lead, UAE at Turner &Townsend delves into the construction industry and its trends in the country
Construction activity within the Emirates continues to be elevated, with a strong pipeline of development opportunities. However, projects are under pressure from rising costs, a stretched supply chain, and growing regulatory expectations around the environment. It’s crucial that we, as an industry, address and navigate these trends effectively to achieve sustainable growth and success.
The scale of investment across the country is significant and has driven an expansion in the construction sector, reflecting a positive overall economic picture. In April, the International Monetary Fund forecasted that the country’s real GDP would grow by 3.5 per cent in 2024 and accelerate to 4.2 per cent through 2025.
The construction industry is shouldering a great deal of responsibility for ensuring this investment comes to fruition. The sector has capitalised on opportunities such as increased demand for upscale residential properties, office and retail space investments, industrial facility expansion, and infrastructure projects catering to the growing tourism sector.
A strong pipeline of government-backed projects, including the success of Expo 2020 Dubai and COP28, have asserted the UAE’s continued importance as a global destination. These are matched by a commitment to pioneering infrastructure to support the country’s growing population and demand from tourism – most notably with landmark public projects like the expansion of Al-Maktoum International Airport, which is set to become the world’s largest hub by 2030.
Resilience to accommodate this growth is also at the forefront of my mind. The announcement of the Deep Tunnels Portfolio programme – at a suggested cost of AED80bn+, is the latest phase of investment to transform Dubai’s wastewater infrastructure. Abu Dhabi’s capital is also undergoing significant infrastructure developments such as upgrading roads, implementing a light rail transit system, and redeveloping Mina Zayed port.
However, alongside these opportunities come challenges to delivering construction as planned, including a tightening pool of contractors and inflationary pressures. Strategic procurement strategies and cost-control measures are crucial to mitigate risks and ensure project success. We can navigate these challenges by fostering collaborative, solid partnerships with suppliers and subcontractors and delivering projects on time and within budget.
The role of private finance is not just important, it’s integral. Public-private partnerships represent a cornerstone of the UAE’s approach to addressing affordable housing needs. By leveraging our expertise and resources in collaboration with government entities and other stakeholders, we can deliver high-quality, cost-effective solutions that meet the nation’s housing requirements while generating value for shareholders. This collaborative approach underscores the value we place on each stakeholder’s contribution, making them feel valued and integral to our operations.
Ultimately, navigating the pressures caused by a growing economy relies on thinking differently and innovation lies at the heart of the UAE’s strategy for sustainable growth. By embracing cutting-edge technologies such as Building Information Modelling (BIM), drones, virtual reality, and AI, we as an industry can enhance efficiency and quality in construction, gaining a competitive edge in the market. This commitment to innovation should inspire and excite our audience about the future possibilities and potential of our industry.
Turner & Townsend is committed to guiding the company through these transformative times, ensuring we harness the full potential of the UAE’s growth trends. By participating in major infrastructure projects, diversifying our portfolios, embracing technology, and prioritising sustainability, Turner & Townsend can position itself for success in a dynamic and evolving market landscape.
In summary, the construction industry has an immense opportunity to drive growth and embrace innovation. To stay ahead of the curve, we must continue to leverage insights and strategic foresight to strategise and shape the future of in-country construction.