Half of UAE Construction Projects Delayed Says Report

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(DUBAI, UAE) -- According to a new report to be published Sunday, more than half of the construction projects in real estate, infrastructure, and leisure and entertainment in the UAE are now on hold. That still leaves construction projects worth almost $700 billion going ahead as planned.

"The UAE may no longer be the land of milk and honey but it is still in a far better position than most," said Emil Rademeyer, director of Proleads Global, the Dubai-based publisher that produced the first in-depth investigation into the state of construction in the UAE. "To put it into perspective," he added, "the $698 billion of continuing work we are reporting is almost equivalent to the latest stimulus package proposed for the United States."

The report called Insights United Arab Emirates; an investigation into the current and future state of the construction industry concludes that 52.8 percent of the total current civil construction project portfolio of the UAE, worth $582 billion, is now on hold while a further $698 billion remains in operation.

The report recognizes "potential trouble" if the rate projects go on hold increases further but nevertheless sees a "resilient industry" in terms of cash flow levels at a time of global recession.

"It is this resilience that will eventually see UAE construction through to better times," said Rademeyer. "The US economy took the world into recession and it will ultimately lead the global economy out of recession. I can see the UAE benefiting during the second quarter of 2010."       

In the short term the Proleads report suggests that the UAE has yet to feel the full effects of the global economic crisis. "Within the real estate sector, it is likely that we will witness more deferred projects throughout 2009 as will be the case, but to a lesser degree, within the infrastructure sector," the Proleads report says.

The Proleads investigation encompasses 1,289 projects in real estate, including residential, commercial and retail buildings; infrastructure, including roads, railways, bridges, ports, educational and healthcare facilities; and leisure and entertainment which covered sports facilities, theme parks and hotels.

Using information correct as of mid-January, the report says that real estate projects continue to account for a huge 84 percent of the $1.28 trillion total budget; compared with only 8 percent each for the infrastructure and leisure and entertainment sectors.

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