DUBLIN--(BUSINESS WIRE)--The "United Arab Emirates Construction Industry Databook Series - Market Size & Forecast by Value and Volume (area and units), Q2 2023 Update" report has been added to ResearchAndMarkets.com's offering.
Construction industry in United Arab Emirates was expected to grow by 6.9% to reach AED 265,969 million in 2023.
Despite near-term challenges in certain construction sectors, medium to long term growth story in United Arab Emirates remains intact. The construction industry in United Arab Emirates is expected to grow steadily over the next four quarters. The growth momentum is expected to continue over the forecast period, recording a CAGR of 5.7% during 2023-2027. The construction output in the country is expected to reach AED 331,843.2 million by 2027.
Despite the slowdown in the global economy, the United Arab Emirates has shown resilience in terms of construction industry growth in H1 2023. Driven by increased infrastructure spending and uptake in residential construction projects the Emirates is leading the growth in the regional market. The trend is projected to further continue in H2 2023 and Q1 2024 as megaprojects pick up speed.
Hotel construction activities have remained strong in the first half of the year and the trend is expected to remain robust going forward, as an increasing number of projects are being launched to tap into the rising tourism market in the Middle East. The commercial construction sector is also expected to gain momentum, as corporates are seeking to build their presence in the Emirati nation over the next few years.
The growing appetite for luxury residential properties to aid construction industry growth in the Emirates
Ever since the pandemic outbreak, the appetite for luxury properties has been growing at a rapid pace in the Middle East market. The trend of high-net-worth individuals looking to tap into the luxury property market is projected to continue over the next few quarters in the Emirates. As a result, more and more developers are lining up their offerings to cash in on the increasing demand in the luxury residential space.
Taraf, the real estate arm of Yas Holding Group based in Abu Dhabi, has started the construction of its upscale project, Luce, located in Palm Jumeirah. The residential project, spanning nine stories and two basement levels, comprises 38 apartments offering 2, 3, and 4-bedroom layouts, as well as duplex apartments and a penthouse. The project was sold out within a few hours of its launch back in February 2023. Having a development value of US$95 million, the project is expected to support the growth of the residential construction industry in H2 2023 and Q1 2024.
Several other luxury residential projects have been announced in the Emirates in 2023. This also includes the US$763 million project announced by Sobha Realty in Dubai in April 2023. In June 2023, Luxe Developers also broke ground on the AED 1.5 billion luxury twin towers. Going forward, the publisher expects more such project launches in the market, thereby supporting the broader industry growth in the Emirates.
Uptake in real estate projects and investment in non-energy infra projects will speed up construction market growth
The construction industry in the United Arab Emirates is poised for accelerated growth over the next few quarters. The growth will be largely driven by the uptake in real estate projects and investment in non-energy infrastructure projects. Some of the major infrastructure projects where construction activities have commenced include the 1,200 km Etihad Rail network, Abu Dhabi Midfield Terminal, and Dubai Urban Tech District. Apart from these projects, Abu Dhabi has also unveiled the project to enhance Rabdan city infrastructure. The proposed construction project includes the development of parking lots, public spaces, and shops, as well as improvement of internal road networks.
In the real estate space, Aldar Properties is also expecting to start the construction of Phase I of its Gardenia Bay project in Q1 2024. Going forward, the publisher expects investment in the non-infra projects to further rise in the Emirates, thereby supporting the growth of the broader construction industry over the next three to four years.
The surge in building material prices can put cost pressure on major construction projects in the Emirates
At the start of 2023, it was looking all good for property developers in the United Arab Emirates. The cost of building materials dropped significantly from mid-2022 onwards, and this was also reflected in the strong uptake of new projects and broader construction industry growth in H1 2023. However, the prices have been following an upward trajectory again since June 2023, and if this continues throughout H2 2023, it can put cost pressure on construction projects across sectors. Since June 2023, prices of raw materials including steel, cement, and concrete have all gained in the Emirati market, catching many developers by surprise.
If the cost pressure continues to sustain, developers will ultimately put it back on the end users, resulting in a slowdown in the uptake of new construction projects. Residential buyers have started to get cautious regarding their investment in real estate on the back of the rising interest rate environment. Further cost pressure is, therefore, likely to hamper the growth of the industry from the short to medium-term perspective.
This market intelligence report provides a detailed view of market opportunities in the building and infrastructure construction industry at country level. With over 100+ KPIs, covering growth dynamics in building construction, infrastructure construction, construction cost structure analysis and analysis by key cities in UAE, this databook offering primarily provides data-centric analysis with charts and tables.
Scope
Market Data and Insights
- Market size by value
- Market size by volume of construction
- Number of units
United Arab Emirates Economic Indicators
United Arab Emirates Top Cities Construction Data
United Arab Emirates Residential Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
- Housing type (multi family, single family)
- Key cities (Tier - 1, Tier - 2, Tier - 3 segmentation)
- Price point/income level (luxury, mid-tier, affordable)
- Construction stage (new construction, re-development & maintenance)
United Arab Emirates Residential Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
- Green building by Housing type (multi family, single family)
- Green building by Key cities (Tier - 1, Tier - 2, Tier - 3 segmentation)
- Green building by Price point/income level (luxury, mid-tier, affordable)
United Arab Emirates Commercial Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
- Office (further broken down by Grade A, Grade B, and Grade C)
- Retail (further broken down by Grade A, Grade B, and Grade C)
- Hospitality (further broken down by Grade A, Grade B, and Grade C)
- Restaurant (further broken down by Grade A, Grade B, and Grade C)
- Entertainment
- Sports facility
- Other commercial building construction
- Construction stage (new construction, re-development & maintenance)
United Arab Emirates Commercial Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
- Office green building construction
- Retail green building construction
- Hospitality green building construction
- Restaurant green building construction
- Entertainment green building construction
- Sports facility green building construction
- Other commercial green building construction
United Arab Emirates Industrial Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units)
- Manufacturing Plants building construction
- Chemical & Pharmaceutical building construction
- Metal & Material Processing building construction
- Construction stage (new construction, re-development & maintenance)
United Arab Emirates Institutional Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
- Healthcare construction
- Educational construction
- Other building construction
- Construction stage (new construction, re-development & maintenance)
United Arab Emirates Institutional Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
- Healthcare green building construction
- Educational green building construction
United Arab Emirates Infrastructure Construction Sectors: 10- year market size & forecast in value terms by
- Marine and inland water infrastructure
- Utility system construction (oil and gas infrastructure, communication infrastructure, power infrastructure, water and sewer infrastructure)
- Transportation infrastructure (highway, street and bridge construction, railway construction, airport construction, and tunnel construction)
- Construction stage (new construction, re-development & maintenance)
United Arab Emirates Green Infrastructure Construction: 10- year market size & forecast in value terms
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