MAYS IBRAHIM (ABU DHABI)
Abu Dhabi and Dubai have emerged among the most cost-competitive construction markets globally, according to Arcadis’ International Construction Costs 2026 report.
The report ranks 100 cities by construction costs, from most to least expensive, based on a survey covering 20 building functions and a review of market conditions.
Abu Dhabi and Dubai placed 69th and 68th, respectively — with an index score of 99, putting their construction costs well below those in major hubs in Europe, North America, and Asia-Pacific.
Geneva and London topped the ranking as the world’s most expensive construction markets, with index scores of 227 and 211, respectively, followed by Zurich, Munich, Copenhagen, New York City, San Francisco, Dublin, Bristol, and Philadelphia.
Despite global cost pressures, the UAE market has remained resilient. Arcadis forecasts construction cost inflation of 3.5% to 4.5% for Abu Dhabi through the end of 2026 — a stable pace compared with faster-escalating markets like Tokyo and Seattle, where inflation rates are forecast at 5% to 6%.
The UAE leads the GCC in confirmed construction demand with 700 projects valued at an estimated $138 billion, according to a recent report by the Abu Dhabi Chamber of Commerce and Industry.
The Arcadis report said global construction markets are moving into a more selective investment environment, with capital increasingly directed towards complex, high-performing assets such as data centres, healthcare facilities, advanced manufacturing sites, and energy transition infrastructure.
“Construction cost is no longer just a measure of price,” said Edel Christie, Global President – Places, Arcadis. “It shows where cost, capacity, delivery risk and investment confidence are converging.”
He added that investment will flow to markets where projects are “credible, viable and achievable” rather than simply cheaper to build.
The shift is particularly evident in the data centre sector, which Arcadis identifies as a “development megatrend”.
The UAE has been at the forefront of that shift. In May 2025, Abu Dhabi unveiled the 5GW UAE-US AI Campus, set to become the world’s largest AI campus outside the United States.
The project will be developed in phases, beginning with Stargate UAE, a 1GW AI computing cluster expected to bring its first 200MW online in 2026.
Developed by G42 alongside OpenAI, Oracle, Nvidia, Cisco, and SoftBank, the campus will underpin the country’s ambitions to become a global hub for artificial intelligence.
Supporting that growth, Khazna Data Centres is expanding its AI-ready infrastructure in the UAE and abroad.