The UAE's construction sector has witnessed a traumatic nine months. Dubai's market all but stopped overnight with investment drying up, resulting in the stalling of speculation-led projects as developers struggled to maintain capital flow. In the capital Abu Dhabi, however, progress has been hampered but not stopped. The emirate is maintaining a bullish pace with many developments continuing to progress.
The $27bn Saadiyat Island, which is to host international culture brands such as the Louvre and Guggenheim continues to move forward.
This week, the client, the Tourism Development and Investment Company (TDIC), announced that it had signed a deal with the British Museum to assist in the development of the Zayed National Museum.
Development on Yas Island is also continuing as planned. With the F1 season in full swing and due to climax at the new course on Aldar's $40bn project in a few months, there is little option but to ensure it is completed.
Lee Kandalaft, deputy director infrastructure on Yas Island said that it is 'a special time' for Yas Island since the dearth of work has seen the odds become stacked in favour of the developers. 'Yes, we have got lucky. But we have 115 days until 1 November [F1 Grand Prix] but we hope that within one month we can commence FIA testing. Yes, everybody in real estate has struggled but there is work. You look around and there are huge projects going up.'
New contracts
According to data compiled by Meed magazine, Abu Dhabi is set to award $7bn worth of construction contracts this year. It is little surprise that contractors, desperate to secure tenders on financially-viable projects are turning their attention to Abu Dhabi.
Philippe Dessoy, General Manager of the Belgian contractor Six Construct said the firm was 'very worried about Dubai' and intended to increase its workload in the capital from 60% to 75% of all work.
In May, Abu Dhabi's Tamouh Investments awarded an Dhs860m contract to Hong Kong-based CSHK for two residential buildings on Reem Island. And in the same month TDIC awarded a Dhs2bn contract to South Africa's Murray & Roberts Contractors (Middle East) and the local Al-Habtoor Engineering Enterprises to build its St Regis resort.
Sorouh posts H1 results
As a consequence developers appear more robust than first thought. Abu Dhabi's Sorouh Real Estate released its half year results for the period ended 30 June 2009 suggest all is not lost in UAE construction.
While its figures were down on the same period 12 months ago, they were an improvement from the previous quarter.
Net profit for the half year 2009 was Dhs151m representing a 16% increase on the first quarter 2009 (Dhs130.4m) but a sizeable decrease against the second quarter 2008 (Dhs616m).
Furthermore, during the second quarter, Sorouh announced a new customer initiative for The Gate Towers at Shams Abu Dhabi on Reem Island. This included a price reduction and assisting customers in finding suitable financing for their property purchases.
Mounir Haidar, CEO of Sorouh said: 'We are pleased to report in-line with previous guidance of quarter on quarter earnings improvement...Despite the tough economic environment, long term demand remains promising and we are actively managing the company's cash position. This combined with the ongoing investment in Abu Dhabi's infrastructure, makes us well-placed to capitalise on our position when the markets recover.'
According to the developer, all its Abu Dhabi developments remain on track, with Sun Tower and Sky Tower on Reem Island both topped out 100 days ahead of schedule, and due to be handed over during the first half of 2010. The firm's outlook is for a gradual improvement quarter on quarter.
Source:
AME Info
