MAYS IBRAHIM (ABU DHABI)
Despite prevailing global economic challenges and geopolitical tensions, the UAE’s projects market remains robust, according to the UAE Construction Market Intelligence Report for Q1 2024 issued by JLL, a firm specialising in real estate and investment management services.
As of Q1 2024, the UAE projects market is estimated at $590 billion, representing a 15% share of the overall Middle East and North Africa’s total pipeline value of $3.9 trillion, the report said. Residential projects account for $125 billion (21%), while mixed-use projects represent $232 billion (39%), the report disclosed.
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In figures: |
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$590b |
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$3.9 trillion
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$87b
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“Over the past four years, the Gulf Cooperation Council (GCC) and wider Middle East and North Africa (MENA) region have demonstrated remarkable resilience amidst the pandemic and have steadfastly pursued economic diversification,” the report noted. “As a result, the projects market in the region has thrived with a high-value pipeline, especially in the UAE, which is actively working towards its economic diversification goals.”
In 2023, the UAE achieved a significant milestone with $87 billion worth of projects awarded, compared to $31 billion in 2022, underscoring substantial progress in economic diversification and investment.
According to the report, the construction sector played a pivotal role, contributing $42.9 billion or 49% of the total awards, with the remaining distributed across sectors such as oil, gas, transport, and utilities. Notably, within the construction sector, residential projects accounted for $27 billion (31%), while the hospitality sector contributed $4 billion (5%).
Promising Growth ProspectsJLL Research predicts that Dubai will see the completion of approximately 25,000 residential units in the remaining months of 2024, with 10,000 units already delivered in Q1 alone. This aligns with a significant 21% year-on-year increase in sales and rental prices as of March 2024, pushing Dubai’s total residential stock to around 754,000 units.
In Abu Dhabi, around 1,600 units were delivered during Q1 2024, with an additional 6,000 units in the pipeline for the remainder of 2024. This is expected to result in a total stock of 294,000 units. Additionally, the capital recorded more moderate annual increases of 5% in sales prices and 2% in rental rates.
The report further highlighted figures related to the hospitality sector. It noted that Q1 of 2024 marked the addition of 2,000 hotel rooms in Dubai, mainly in the 5-star category, with another 5,000 rooms expected in 2024, bringing the total to 160,000 hotel rooms. Abu Dhabi on the other hand plans to add approximately 500 hotel rooms in 2024, totaling 34,000 rooms.