How is the UAE construction sector back in business?
A report by real estate investment and advisory firm JLL states that “the UAE construction project market rebounded in 2021, with the residential sector performing best among construction asset awards.” With the trend set to continue through 2022, the market is experiencing several successful residential project launches.
The concept of working from home triggered by the Covid-19 pandemic is proving profitable for the construction sector. Homebuyers are now demanding spacious and luxurious living spaces in all-inclusive communities featuring a range of recreational facilities such as parks, gyms and swimming pools as well as outlets such as restaurants, schools and points of sale. The sentiment was bolstered by new visa legislation from the UAE government which allows property investors to obtain a golden visa when buying property worth Dhs 2 million.
Leading property developers across the UAE are riding the trend by announcing a slew of high-end mixed-use projects. Nakheel’s master plan for the development of its Dubai Islands (formerly known as the Deira Islands) includes a diverse mix of residential, commercial and hotel offerings. In addition to 20 km of beaches and two square kilometers of parks, open spaces and golf courses, the islands will be dotted with nearly 80 luxury and wellness resorts and boutique hotels, enhancing Dubai’s vacation appeal. Earlier this year, the Dubai-based master developer also launched Tilal Al Furjan, a collection of 220 luxury villas that overlook its flagship Al Furjan community. Nakheel has also started work on his development Murooj Al Furjan which sold out last year. Due for completion in 2024, the 620 villas and townhouses in Murooj will be built by Al Shafar General Contracting.
Emaar Development, Dubai-based Emaar Properties’ build-to-sell real estate arm delivered more than 3,000 residential units in the first half of this year. At the same time, she launched more than ten projects including Talia and Orania in The Vallée, Elie Saab II and Bliss 2 at Arabian Ranches III, Greenview 3 at Emaar South, Park Field at Dubai Hills Estate and Seagate in Rashid Yachts & Marina. The Talia and Orania projects alone will add 638 luxury homes to Dubai’s property scene when completed in 2025. Buoyed by these new launches, Emaar Development reported its highest property sales of Dhs 15.21 billion over the past from the first half of 2022. In August this year, the developer fully acquired Dubai Creek Harbor from Dubai Holding, the emirate’s eponymous property developer. With this MAD 7.5 billion acquisition, Emaar Properties has added 100 million square feet of land to its future development portfolio.
Last year the Dubai Deyaar appointed Gulf Asia Contracting as prime contractor for its Regalia project. To be built at a cost of Dhs750m, it will be the tallest residential project ever by the developer. Launched in July 2021, more than 85% of units were sold in September, bringing in 900 million Dhs. The project is expected to be completed by 2024. In June this year, the developer also announced Dubai Silicon Oasis’ first luxury residential tower, Tria, which will include studios, one-, two-, and three-bedroom apartments, duplexes, and penthouses on more than one million square feet of built-up area. In addition to stimulating construction, demand or premium residences are also boosting the real estate market in Dubai. The emirate ranked fourth in the Savills Prime Residential Index: World Cities in August 2022. The only non-US city to make the top five, Dubai recorded strong performance in terms of residential capital value as well as rents. Core prices rose 4.7% in the first half of the year and the city is expected to experience strong capital growth for the remainder of 2022.
“The demand for real estate in Dubai has not slowed down over the past six quarters. Initiatives such as the Golden Visa have increased Dubai’s appeal as a long-term residence for expats and global investors, driving demand in the property market. According to data from the Dubai Land Department, there have been over 66,000 transactions in the last year alone; an increase of 50% compared to the same period the previous year. To meet this growing demand and taking into account the unique preferences of end users, there is a real need to create a steady supply of new inventory in the market. The volume of off-plan transactions has also increased impressively, increasing by more than 70% in the last 12 months, which suggests that there is a constant interest in new projects,” explains Haider Ali Khan, CEO of Bayut and dubizzle and director of EMPG. MENA.
Bigger houses for Abu Dhabi
Fueled by Covid-19 lockdowns, high returns on investments and limited supply, Abu Dhabi is also seeing strong demand for larger, luxury villas. In response, major developers in the capital are launching several high-end residential developments. In June 2022, Q Properties (a subsidiary of Q Holding of Abu Dhabi) appointed ATGC Transport and General Contracting to carry out the first construction works of the first phase of its Dhs 8 billion Reem Hills luxury residential development. Anchored on the eastern face of Reem Island, the 1.8 million square meter project is managed by Abu Dhabi-based Royal Development Company and is expected to be completed in 2024.
Later this year, the emirate’s Aldar Properties will begin construction of Saadiyat Grove, a Dh10 billion mixed-use mega project on Saadiyat Island. Spanning 6.2 million square meters of prime land, the integrated community will include nearly 3,000 residential units, most of which are villas. Another development on the grove is the Louvre Abu Dhabi Residences, a collection of 400 luxury apartments that also offer views of the famous Louvre Abu Dhabi.
than the Persian Gulf. The property is expected to be delivered in 2025.
The village of Ain Al Maha, a new riverside community, rises on the island of Jubail, next to the island of Saadiyat. Launched by the Jubail Island Investment Company (JIIC) in July this year, it comprises 240 villas facing the sea and the mangrove and is expected to be completed in 2025. Prior to that, JIIC awarded a Dhs 40 million contract to Al Dhafra Pipeline and Contracting Company for a new 66 berth marina in Marfa Al Jubail community expected to be completed by mid-2024. JIIC plans to unveil the Marfa Al Jubail neighborhood in October.
Another 257 villas will be up for grabs when Bloom Living opens in Zayed City in late 2024. Phase 1 of the project sold out within four hours of its market launch, and its Abu Dhabi-based developer Bloom Holdings hopes to replicate the same success when Phase 2 goes live later this year. In total, the Dhs9bn Bloom Living project will include 4,000 villas, townhouses and apartments over 2.2 million square meters.
The Northern Emirates join us
To the north, Sharjah Sustainable City has now begun to welcome its first residents. Two hundred and eighty villas will be delivered in the first phase of the project which is expected to have a total of 1,250 villas, recreation areas and green spaces spread over 7.2 million square feet of land when completed. Recently, Sharjah-based property developer Alef announced its Dhs 3.5 billion Hayyan project which will span 8.7 million square feet and feature 1,836 smart villas and the world’s largest blue water lagoon. swimmable and the largest community park in the emirate. Sharjah’s Arada has also unveiled phase three of its Dhs8bn Masaar project under which 565 villas and townhouses will rise in the Suyoh district of the emirate. Masaar’s master plan includes 4,000 homes divided into eight gated communities covering 19 million square feet. During the first half of 2022, Arada awarded contracts worth Dhs 460 million for the first phase of Masaar. He also sold 980 houses worth Dhs 709 million to Aljada, his other mega-project in Sharjah. Aljada will be Sharjah’s largest mixed-use community to be built at a cost of Dhs24 billion.
The smallest emirate in the United Arab Emirates, Ajman, is also capitalizing on the demand for luxury accommodation. Recently, Al Zorah Development Company (a joint venture between the Government of Ajman and Solidere International) launched its SeaSide Hills beachfront residential project which will feature luxury apartments and villas with private beach access.
Among the Northern Emirates, Ras Al Khaimah has one of the busiest construction pipelines. In July, Al Hamra in the emirate launched the second phase of its idyllic Dh1 billion residential community, Falcon Island, which will offer 127 luxury townhouses and villas from Dh1.2 million. The first phase of the project was launched in March when more than five hundred villas were released and all of them were sold within a week. Construction is expected to begin later this year and will be completed over a period of 24 to 28 months. Ras Al Khaimah’s six million square foot Hayat Island is also undergoing a major makeover with its Gateway Residences 2 and Bay Residence – Central 1 from RAK Properties. projects are born there.
Al Hamra Group CEO Benoy Kurien attributes increased investor interest in Ras Al Khaimah to booming tourism, affordable infrastructure and attractive returns on investment. He also highlights the long-term residency visa package that Al Hamra offers in partnership with Ras Al Khaimah Economic Zone (RAKEZ) which gives investors the opportunity to obtain a 12-year residency visa and business license. . “This has been a game changer as investors from all over the world have purchased our residences in Al Hamra Village and Bab Al Bahr. Given these attractive initiatives, our residential communities are now home to over 100 nationalities,” he says.
Thanks to the UAE Vision programs, the 2022 UAE Federal Budget, the recovery in oil prices and improved investor confidence, market sentiment is undeniably positive in the construction sector. The sector is expected to reach a value of $133.53 billion by 2027 according to the UAE Construction Market (2022-2027) report. UAE government infrastructure projects, including housing, tourism and transportation networks, will also make a significant contribution to the sector. Given the pipeline of upcoming projects, it is obvious that design and construction opportunities are plentiful for the next few years.