When the cranes were at their prime
This article provides a snapshot of Dubai in 2005.
In our last edition, we gave you the random numbers. This time, we want to give you one more number that will astound you, which will begin to give you a snapshot of the construction industry in the UAE and the Middle East. Within the next 5 years, a further 32,000 hotel rooms will be built in the UAE. Yes, you read that right, 32,000 rooms with a spend of $40 billion. That will double the amount of hotel space in the UAE in 5 years. And these numbers only cover those hotels that have been announced. With more projects being talked about, nearly every week, you get a good idea about how dynamic the construction market is and how it will continue to be for a good few years at least.
Despite the Israeli - Palestine conflict and the regular insurgences within Iraq, the whole of the Middle East is experiencing some phenomenal growth. Why?Diversification. In times gone by, oil was a focus - but using that market as a lever, the astute leaders in the Middle East are looking at other ways of bringing money to the region. One of these areas is tourism. There is a big push for it in the UAE - especially Dubai, and with tourism brings the need for labour and indeed construction.
The construction breakdown activity really does focus on the UAE, with two thirds of all spending occurring in the Emirates, with ‘minimal’ percentages focused on the other GCC states. I say minimal, because if you look at a pot of $60 billion dollars, there is significant construction going on in all areas. And by the time you read this, that number will probably have increased.
It's not surprising that Dubai has the bulk of the market. For those of you who've visited Dubai recently, or who currently reside here , you will have seen more cranes per day than you had done in the whole of your lifetime (and probably more associated traffic on the roads as a result!). But Dubai does not remain as the sole area of development. With $15 billion being planned by the Abu Dhabi Tourist board for the development of Saadiyat Island, it is clear that Abu Dhabi is following Dubai’s successful investment model in diversifying away from a predominant oil economy. 30 new hotels, representing a further investment of $10 billion, shows exactly where the economy is going.
The onus is on encouraging private investment and $49 billion dollars focused on the civil industry, over the next 3 years alone, is no small change. Further exponential growth will show that this industry has no intention of letting up, in a part of the world which appears to be defying modern economics