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Drees & Sommer Middle East expects construction market to grow stronger in 2019

Infra News - Published on Thu, 17 Jan 2019

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International construction and real estate consultancy, Drees & Sommer Middle East, believes the regional construction sector will hold greater opportunities for the Digitization and Revitalization of built assets, as well as Adaptive Modular Design as a construction tool, following 2018’s slowdown in construction activities attributed to reduced oil prices and subsequent cuts to project spending across the region in 2018.

Drees & Sommer predicts increased momentum for the construction sector driven by government support through long-term economic diversification plans, including Abu Dhabi Vision 2030 and Saudi Vision 2030. The consultancy believes these agendas will develop fundamental sectors including hospitality, healthcare and infrastructure, while tourism and gradually stabilising oil prices will contribute to higher capital spend on construction projects in the region over the coming year.

Currently, Saudi Arabia and the UAE remain the largest regional markets and are expected to award construction contracts valued at over USD 320 billion over the next twelve months. In addition, there is currently over USD 3 trillion worth of projects in the pipeline for the regional construction sector over the next decade, according to Deloitte Middle East, during 2018’s Leaders in Construction Summit.

Mr Stephan Degenhart, Associate Partner at Drees & Sommer and Managing Director of the Middle East office, said that “Although the real changes will happen over the next ten years, higher capital spend in 2019 on construction projects throughout the region will likely draw an increased focus on ROI for developers and investors. Adaptive Modular Design and Digitization at planning stage and Revitalization at operation phase are the frontrunners to enable increased ROI. The Middle East’s construction industry is currently far less digitally developed than those in other parts of the world, presenting a key opportunity for growth. Greater attention will be given to projects throughout the three stages of the construction process: planning, build and operations, with particular emphasis on early adoption in the planning stage or even phase zero. This will provide greater opportunity for the integration of digitalised adaptive modular solutions to ensure longevity, flexibility and ROI. Key digital trends such as 3D printing, 3D laser scanning, digital pre-fabrication and continuous advances in Building Information Modeling (BIM) will begin to make more of an appearance within the regional construction sector as it continues to develop and shift in focus towards a more digital future. BIM is a good example of a smart system already becoming a mandate for some construction companies and developers, such as CCC and Emaar, while more companies are expected to enforce similar policies over the coming year.”

Mr Degenhart noted markets such as the UAE and Saudi Arabia, which aim to further develop economic sectors including tourism and hospitality, will have different requirements to markets like Egypt and Oman, whose economic diversification agendas focus more on transport and infrastructure.

Mr Filippo Sona, Managing Director, Global Hospitality at Drees & Sommer added that “The GCC hospitality sector is currently going through a period of stabilisation, with occupancy levels remaining strong and average room rates unchanged year on year. Despite the hospitality sector already generating a healthy volume of business, hotels will need to develop strategies to become more efficient and stand out if they want to remain profitable and achieve better ROI. As certain markets place greater emphasis on developing their hospitality sectors, there will be higher demand from investors to create smart buildings that are more adaptable to user needs. Smarter engineering designs have provided new means of increasing ROI and market attractiveness, through a range of user-centric and energy-saving features such as smart parking and automated lighting and air-conditioning.”

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Posted By : Joykumar Irom on Thu, 17 Jan 2019
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