Only 2/3 of construction sites remain active
Nearly one third of UAE building projects are now inactive, according to a Dubai-based research company.
Emil Rademeyer, a director at Proleads, said: “New projects starting have slowed and projects completing are accelerating and cash flow is declining.”
He said the remaining construction industry still represents a large investment – research indicates that 1,845 projects worth a combined $657bn are still active (i.e. not cancelled, completed or on-hold).
However, Rademeyer said the industry as a whole would shrink unless new investment was found.
“Although the overall situation looks stable, unless investment for new projects is found the size of the real estate industry will shrink and its overall shelf- life will be reduced,” he added.
The Proleads study splits the market into four sectors: commercial/civil, education/healthcare, leisure/entertainment and residential.
The largest of these sectors by number of projects as well as by budget is the commercial and civil sector. The total market consists of 829 projects valued at $412bn.
The residential sector is made up of a combined value of $312bn. The rate that projects are being cancelled has accelerated over the course of 2009, although the majority of projects are still in progress.
Projects classified within the leisure and entertainment sector amount to over $233bn spread across 445 projects, while education and healthcare has almost 700 projects worth $57bn.