Projects worth $130 bln completed in GCC this year: study

The construction sector in the Gulf Cooperation Council (GCC) saw $130 billion of completed projects during 2017-to-date, versus $100 billion for the full-year in 2016, a recent study by MENA Research Partners (MRP) said.

The figure is on par with the annual average of $135 billion during the 2009 to 2014 period, and comes despite the recent headwinds the sector faced due to low oil prices and budget adjustments in many GCC countries, the report said.

“With total GCC active projects at around $2.6 trillion – equivalent to 160 percent of GDP, the regional construction market presents sufficient depth and opportunities for investors and regional market participants over the years to come,” the research firm added.

Saudi Arabia and the UAE together accounted for 70 percent of the value of active projects.

“This surge (in the construction sector) is driven by economic diversification away from hydrocarbons in leading GCC countries, with a particular focus on sectors like transportation, power and water, manufacturing and energy projects totaling in excess of $ 1 trillion of projects in the pipeline,” Anthony Hobeika, chief executive officer at MRP, said in the report.

Governments remain the key drivers of construction activity, with their main focus remaining on large strategic developments, such as flagship real estate projects, energy, and airports.

The private sector, meanwhile, has primarily targeted consumer-driven sectors like retail, logistics and industrials, he added.

“Among rising trends, tourism and leisure-related projects are increasingly viewed as strategic new emerging sectors that many countries are looking to tap into, with many regional countries now aiming to become key entertainment and cultural destinations for domestic and foreign tourists,” Hobeika said.