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MENA Construction Boom: Restructuring the Region
Saudi arabia is the largest construction market in the Middle East with multi-million projects that are launched and many are in the planning stage. More than US $ 1 billion of hotel and office building projects in Riyadh alone are being developed. The building boom is also being spurred by planned government investments to expand the country’s electricity network and water supplies. The largest of projects is King Abdullah’s Economic City which will attract a US $ 26.6 billion in order to achieve as well as the Makkah City venture (US $ 2.6 billion). The construction element that is attached to power supply development is estimated at nearly US $700 million. In total, current infrastructure and public sector building programs are valued at some US $ 35 billion. In addition, the Jeddah Municipality is planning to build some 30 bridges and tunnel projects at US $ 533 million over the next five years. Qatar has greatly profited from the increase of the oil and gas prices, and scoring thus a growth rate that exceeded those attained by neighboring GCC states. Qatar’s real gross domestic product (GDP) is projected to increase 6.6% by the end of 2006. The Qatari government is investing every provided effort to diverse its income resources and has amplified its budget allocations by 17 % In Kuwait, the construction market is in the wake of improved confidence wherein a wave of vast and high-valued projects are underway and that are estimated at US $ 200 billion, like Khabary City Project (US $ 5,500 million)and Madinat Hareer (86,000 million) to name a few. Infrastructure projects are planned to rise over US $ 15 billion mark in 2007. During the first seven months of 2006, average real estate sales rose by 14 percent in value and 3.3 percent in number. The real estate boom that was initiated in the Uae back in 2002 had its ripple effects on all GCC states. In 2005, the Uae held 64% of new projects in the region and has the biggest expenditure budget on the civil industry with US $ 77 billion to be deployed over the next 3 years. Uae is a very fertile land with endless investments and projects that are already in progress or in their planning phase. The Mall of Arabia, for instance, is part of the City of Arabia project (US $ 2,000 million) in Dubailand and is to be the biggest shopping centre in the world. Finally, it is important to mention the Burj Dubai scheme (US $ 20,000 million) that will be completed by 2009/2010 and which comprises the world’s largest tower as its main landmark. The expectancies and optimism that were bargained upon in the real estate sector in Lebanon were turned asunder by the recent war. However, the increase in the GDP trend was supposed to inflate the sector; the related market summed US $ 689 million during the first quarter of 2006, against US $ 473 million in 2005. Besides, the land prices in Beirut alone augmented by 40 to 50 % at the beginning of 2006. In Jordan, real estate projects are emerging with new plans to be projected around Aqaba area. A model of prosperity, the mixeduse city Al-Qasaba Residential City will be the first to be built at US $ 142 million. One of the major projects in the Levant area is Syria’s Jabal EL-Sheikh US $ 15 billion investment that is led by investors from both Europe and the Uae. As regards Turkey, the economic growth has been strong so far in 2006; GDP growth is forecast to be 5.5% in 2006 and about 4.5% in 2007. To speak of iraq, the new Iraqi government is still waiting for stabilization so that it may be able to launch the reconstruction projects. Some developments have been underway along with the Americans aimed at rebuilding and rehabilitating some of the torn infrastructure, the power-related sector for instance. Speaking of iran, figures released by the Central Bank of Iran reveal that the country enjoyed a 5.4% boost in its GDP last. It has reported that US $ 24 billon will be taken from the Foreign Exchange Reserve Account in order to fund private sector projects. Looking at the North African area, one could notice a certain change prowling somewhere with first signals from algeria and egypt. High oil prices are setting the groundwork for newly expected foreign investments, in algeria; paralleled with a US $ 50 billion development program that is assumed for over a five year period and that is targeted towards infrastructure, as well as housing construction. Lately, the construction industry has been witnessing a 6% growth rate per annum with 800,000 residences to be built. As to egypt, the Egyptian government is discussing trade contracts with Chinese investors worse over US $ 2 billion in an attempt to make the country China the manufacturing hub for the region. We can deduce from all of the above that despite the political turmoil the pace of the construction market in the MENA region has grown and prospered. Investments in the GCC region are exploding with investors from the four corners of the world, including neighboring states as well, increasing their involvement in the market. Africa makes the top-three among reforming regions, after Eastern Europe and the oeCd countries; hence, the north africa region is apt to be a major player in the construction industry with projects seeing light in most of the North African states. Presently there are mega projects targeted towards the roads and bridges infrastructure. The World Bank (WB) has already granted Morocco a loan of US $ 60 million to Sources: www.albawaba.com www.menafn.com www.menareport.com www.economy.gov.lb ACW’s Archive 2006 MENA Region |
