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DOHA: Building projects worth over $68.7bn were completed in the GCC in 2012 according to an in-depth sector report. The report, commissioned by dmg: events, the organising team behind INDEX, and conducted by Ventures ME, forecasts a 19 percent sector growth this year, with completed construction projects set to reach $81.6bn.
The value of new construction projects in the GCC is also expected to rise in 2013, with projects valued at $64.5bn set to be awarded to contractors over the coming 12 months. This figure shows a sharp increase, up by a third (33 percent) on the value of projects awarded in 2012 ($48.4bn).
In 2012, residential, commercial and hospitality sectors led the GCC projects market; with $29.4bn, $12.2bn and $5.5bn worth of projects completed respectively. Education, medical and retail sectors were other significant contributors, with completed projects worth $5.2bn, $3.3bn and $2.4bn respectively.
In 2013, a two-paced growth is likely with residential, retail and commercial sector construction projects growing at slower rates of 4.4 percent, four percent and 13 percent to $30.7bn, $2.5bn and $13.8bn respectively.
However, hospitality, educational and medical projects will grow at faster rates of 27 percent, 69 percent and 79 percent respectively to $27bn, $8.8bn and $5.9bn.
The hospitality and educational sectors of the GCC building construction industry will see their market share by value of projects completed in 2013 grow tremendously by 137 percent (from 3.8 percent to nine percent) and 134 percent (4.7 per cent to 11 percent) respectively.
Residential building projects will remain the largest segment of the real estate market in terms of projects expected to complete in 2013 with a market share of 38 percent.
Commercial projects will remain the second largest real estate sector with 17 percent but educational is set to overtake the hospitality construction segment and claim third place with an 11 percent of the market share against hospitality’s market share of nine percent.
Frederique Maurell, Event Director for the INDEX and Office Exhibitions, who supervised the compilation of the report, said: “A number of construction projects that had been on hold resumed in 2012, as the region’s oversupply concerns were dispelled by a rise in demand due to growth of the population and disposable incomes. Governments have initiated construction across key sectors to cater to this demand.”
Despite being lower than previously forecast, the value of the GCC interior contracting and fit-out market in 2012 was $7.86bn – an increase of 56 per cent against the 2011 figure of $5.04bn and is expected to rise by 17 percent in 2013.
In 2012, the UAE was once again the largest interiors and fit-out market in the GCC and, at $2.83bn. It was followed by Saudi Arabia and Qatar which were valued at $2.6bn and $1.49bn respectively. Kuwait interiors and fit-out market was valued at $472m, Oman’s at $314m and Bahrain’s at $157m.
The residential sector continues to command the largest market share of the GCC interior contracting and fit-out market with a 41 percent share of the overall market value in 2012 ($3.24bn).
While the residential sector is expected to remain the largest sector of the interior contracting and fit-out market in 2013 and increase in value by five percent, it will see its market share reduce slightly to 37 per cent ($3.4bn) as other sectors grow at a faster rate.