Leading Middle East markets continue to experience high growth in construction activity, as the region invests in nation-building agendas that support economic diversification away from fossil fuels, according to Turner & Townsend.

The Kingdom of Saudi Arabia leads the region in new project opportunities and government commitment to major infrastructure investment, with average cost-to-build in Riyadh now reaching at $2,379 per sqm. Conversely, the Doha market is cooling after its unprecedented World Cup programmes.

The survey also shows that the region has been less affected by the supply chain disruption and softening growth seen in other key markets.

Turner & Townsend pointed out that the Middle East presents a relative bright spot in a challenging global construction market, with many other regions experiencing high costs and inflation, as well as critical labour shortages. In fact, the data reveals that 74.2% of global markets show a strong ‘skills shortage’.

From a survey of 89 global cities, the US dominates the rankings of the most expensive places to build, with six US cities in the top ten. New York is the most expensive market, with an average build cost of $5,451 per sqm and San Francisco following closely behind on $5,200 per sqm.

According to ICMS, the most expensive location to build in the region is Doha, with an average cost of $2,588 per sqm. Yet as mentioned, the Doha market is now cooling, with the rate of cost inflation easing from 8.0% in 2022 to 3.5% in 2023. By comparison, costs in Riyadh rose by 10% during 2022.

Turner & Townsend forecasts that costs will continue to rise by 7.5% during 2023 as the Kingdom of Saudi Arabia sees unprecedented investment in new ‘giga-projects’ as part of the country’s ambitious Vision 2030 programme.

The UAE is seeing stable conditions, with an average cost escalation of 4.0% over 2022 and 2023 in Abu Dhabi and 5.0% in Dubai. Hot markets for the UAE include luxury development, including for tourism, as well new infrastructure and improved public realm, stated the report.

A major milestone for the country, and the wider region, is the COP28 conference which will take place later this year. Turner & Townsend’s report identifies the increasing prioritisation of sustainable building practices to reduce carbon emissions and protect water resources across the region.

While the development outlook for the Middle East is buoyant, Turner & Townsend has warned that capacity and resource will need to be carefully coordinated to avoid risks to project delivery and offset growing competition for labour.

Mark Hamill, the Director and Head of Middle East real estate and major programmes at Turner & Townsend noted, “The Middle East remains a hub for investment, with some of the most ambitious infrastructure and development programmes anywhere in the world. With strong pipelines and government-backing, these nation-building agendas are set to transform the region over the next decade.”

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Adnoc Gas has awarded US $1.34bn in contracts to Petrofac Emirates and a consortium comprising National Petroleum Construction Company and CAT International. The project is focused on expanding the company’s extensive natural gas pipeline network.

A unit of Abu Dhabi National Oil Company (Adnoc), the company said the work is being implemented under the sales gas pipeline network enhancement (Estidama) programme.

The new pipeline will extend Adnoc Gas’ existing pipeline network from approximately 3,200km to over 3,500km, enabling the transportation of higher volumes of natural gas to customers in the northern emirates of the UAE.

This strategic pipeline extension will drive further growth for Adnoc Gas as it continues to supply sustainable gas supplies in the UAE, in support of the company’s strategy to increase its market share and enhance its customer base.

“Our strategic network expansion will bring the advantages of lower-cost, sustainable and cleaner gas to more locations across the UAE by enhancing industrial access to natural gas, a cost-competitive and lower-carbon intensive fuel. The expanded pipeline will drive further growth for Adnoc Gas and our shareholders as we deliver on our mandate to achieve gas self-sufficiency for the UAE,” said Adnoc Gas CEO, Ahmed Mohamed Alebri.

As part of Adnoc’s highly successful in-country value (ICV) programme, which aims to enhance the UAE’s local value chain by encouraging local manufacturing and supporting local industries, over 70% of the contracts’ value is expected to flow back into the UAE economy.

Adnoc’s integrated gas masterplan connects all parts of the UAE’s gas value chain, ensuring a sustainable and economical supply of natural gas to meet local and international demand. The plan includes innovative approaches and technologies to increase gas recovery from existing fields as well as developing untapped resources.

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According to Dubai Land Department (DLD) data credits, Indians last year invested $4.32bn into Dubai’s real estate sector, accounting for the second-highest investment by any nationality. Accounting for nearly 12% of the total 97,398 property deals inked last year, they came second after the Britishers who accounted for 21.2% of the deals, as per developer ZāZEN Properties.

Indians are increasingly investing in the Middle East’s real estate market with the UAE and the Kingdom of Saudi Arabia being the preferred destinations of choice; industry analysts expect Saudi Arabia’s real estate industry to flourish as the country’s inches towards achieving Vision 2030, with expectations that the kingdom will parallel that of the UAE’s real estate market, the developer said in a statement.

Madhav Dhar, COO of ZāZEN Properties, added that Indians have been among the leading nationalities to buy real estate in Dubai since 2015, and in 2023, the emirate has continued attracting this investor demographic at a strong rate, remarked. As it stands today, the UAE remains far and away the most appealing location for real estate investment in the GCC, citing the factors attracting a continuous inflow of Indian and International investors, he added.

“Indians have long been intrigued by the prospect of investing in Dubai’s real estate market due to the high investment rental yields that come with it; the cosmopolitan city offers a gross rental yield ranging between 6-10%, and an average return of around 7.5% to provide greater appeal than that of prime locations such as New York, Hong Kong, and London,” explained Dhar.

He continued, “With India reportedly having prepared to quadruple taxes on outward remittances at the start of October, many investors from the South Asian country injected their capital into Dubai’s real estate sector during the first half of 2022 to save substantially.”

Commenting on the KSA market, Dhar said Indians make up around 19% of the country’s expatriate population. He stated, “With the kingdom striving to fulfil a variety of ambitious objectives, Indian investors appear poised to target real estate investment opportunities in Saudi Arabia over the coming years.”

However, the UAE will maintain its leading position in the Middle East with developers innovating to reach Net Zero 2050 mandates, among other goals, he notes.

According to Dhar, these trends could be observed in the sales cycle of his firm’s latest development, ZāZEN Gardens in Dubai’s Al Furjan area.

“ZāZEN products attract a wide range of buyers and investors alike. We had 24 different nationalities purchase in our ZāZEN One project in JVT and now have 22 different nationalities with ZāZEN Gardens. The UAE is home to 10 million-plus people, and Indians account for more than 25% of the country’s total population,” he commented.

He concluded, “LEED Gold-rated and Well-Being integrated, the first-of-its-kind project in Dubai was sold out in less than six months with Indian investors representing the highest-buying demographic. Out of 155 units available for sale, Indian-origin investors bought 70%, Eastern European investors accounted for 8%, Pakistani buyers purchased 6%, and 4% of the inventory was purchased by various EU nationals.”

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Stuart Ells has joined HKA as Partner and Chief Growth Officer for the EMEA region, the firm has announced. In his role, Ells is tasked with accelerating and supporting the growth agenda for the EMEA region, and will work with the EMEA Leadership Team to identify and source growth opportunities, including securing individual senior talent, and team lift outs, as well as M&A opportunities that will help the firm on its growth journey, the firm said.

Ells will report directly to Amanda Clack, Partner and Regional Chief Executive Officer EMEA at HKA.

According to HKA, Ells has over 30 years of corporate experience in the professional services, and media and entertainment sectors. Most recently, he served as Chief Executive Officer at Forensic Risk Alliance (FRA), where he was responsible for all operational planning, running and reporting of the business globally. During his time with FRA, he successfully recruited a number of senior fee earning individuals, grew the Partner base by over 25%, and opened international offices in the Middle East and Asia.

“We are excited to welcome Stuart to the EMEA leadership team, and look forward to working with him to expand our presence across EMEA. His impressive track record in propelling growth in professional services firms aligns perfectly with achieving HKA’s vision for the future in EMEA,” stated Clack.

Ahead of working with FRA, Ells was MD & Chief Administrative Officer for Alvarez & Marsal (A&M) Europe & Middle East, where he was responsible for the management, effectiveness and efficiency of the corporate support functions in the EMEA region. His role included future proofing the support structure to make it scalable to support the very significant growth of A&M in the EMEA region in recent years. Prior to his CAO role, he had led A&M’s European Media & Entertainment Corporate Performance Improvement business, during which time he had served as Interim COO of the Global English division of Pearson Plc.

“I am thrilled to be joining HKA at this exciting time in its growth journey. I am looking forward to working with so many expert colleagues to achieve our ambitious growth plans,” stated Ells.

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Twenty roof panels of five distinct types of a new, seismically isolated roof structure are being installed over the central area of Portland International Airport, Portland, Oregon in the United States. The contract to jack up, transport and install the panels was awarded to Mammoet.

The panels are said to vary in weight between 40t and 632t and measure up to 72m x 50m x 6m. Mammoet noted that it used four towers of Mega Jack 800 to jack up the roof panels to approximately 17m to allow self-propelled modular transporters (SPMTs) with falsework to be driven underneath each roof section. At midnight on the day of each move, the runways were closed for the one-mile transport of the panel from laydown yard to terminal. The roof sections were moved with care at a speed of about 1.6 kilometres, or one mile, per hour, the company noted.

The firm said that most panels had to be installed over the top of populated areas of the existing terminal building. Making safety a priority, works were done during strict overnight closures when the public could be kept clear of the work area. Once the area was verified to be clear of all pedestrians, the installation of the roof panels could begin, the firm said.

Each panel, referred to as a super cassette, was installed using stationary skidding propelled by strand jacks and lowered with the skidding jacks onto column isolators. The next set of panels were then rolled into position down the bottom flanges of the previously set panels. The panels were safely secured with consideration for potential elevated wind and project specific seismic requirements before the public were allowed to reoccupy the area below, Mammoet added.

The roof was crafted mainly from regionally and sustainably sourced wood and was completely prefabricated between the active runways of the airport over the course of a year. Prior to being moved, the roof panels were disassembled into approximately football field sized pieces to be transported to the new terminal expansion. This allowed the airport to carry-on as usual while minimising disruption to airport operations. Depending on the type of panel, each was launched, rolled into place, set directly with SPMTs, or lifted with a crane into its final position.

Mammoet said that a major challenge on the project had to do with the wood material used in the roof panels’ construction. Deflection of the roof panels was a major concern of the client and the roof designers, so at each point in the jacking, transport, and installation process, deflection of the roof was monitored and kept within stringent criteria. Only the super cassette pieces had steel girders in the longitudinal direction to support the 25m wooden arches and to allow the panels to be ‘launched’ using stationary skidding equipment, the firm explained.

The firm also pointed out that the supports for the launching jacks were temporary towers supported by wooden piles, which were installed in the 1950s. To mitigate issues, Mammoet said that it performed extensive friction testing in its Rosharon, Texas yard prior to execution, to ensure no structural damage occurred to a mockup roof panel, and that the design values presented to the client for strand jack anchoring were realistic. When executing the job on site, Mammoet explained that it closely monitored the loads and deflections to ensure that they were in line with the tested values.

Mammoet stated that it has successfully placed sixteen panels, thus wrapping up phase one of the project. Four additional panels will be installed in 2024 during phase two (once the interior of the new terminal expansion has been built by the client for general occupancy), the statement concluded.

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Adnoc Gas Processing, a key subsidiary of Abu Dhabi National Oil Company (Adnoc), has inked a deal with Petrofac to undertake a major engineering, procurement and construction (EPC) project at its Habshan Complex, which is located west of Abu Dhabi. The contract was awarded to Petrofac Emirates and is said to be valued at approximately US $700mn and involves the provision of EPC services for a new gas compressor plant.

Comprising three gas compressor trains, associated utilities and power systems, the new plant will support Adnoc to substantially increase gas output from the Habshan Complex.

With a commitment to deliver In-Country Value, emiratisation is a key business priority and Petrofac is actively promoting current career opportunities, a statement from the firm noted.

“We are thrilled to have been selected by Adnoc, one of Petrofac’s longest-standing customers, to undertake this significant new EPC project in our home market of the UAE. We very much look forward to working together with Adnoc to safely and sustainably develop this critical energy resource,” remarked Petrofac’s Group CEO Tareq Kawash.

Elie Lahoud, Chief Operating Officer at Petrofac Engineering & Construction noted, “We have a long and strong track record supporting Adnoc in the UAE, rooted in our steadfast commitment to maximising local delivery, investing in the local supply chain, and developing local teams. This focus on In-Country Value will once again underpin our approach to delivery for Adnoc on the strategically significant Habshan Complex.”

Petrofac first established a presence in the UAE in 1991 and has developed a large workforce to support both regional and international projects, the statement concluded.

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Acwa Power, a Saudi developer, investor, and operator of power generation, water desalination and green hydrogen plants worldwide, has signed a three-year revolving credit facility (RCF) agreement with China Construction Bank (DIFC Branch).

The company said the agreement provides it with access to a $100m credit facility that will support strategic plans to up-scale its core power and water generation portfolio in the Middle East, as well as the ‘Belt & Road’ countries engaged with China Construction Bank. It also aims to contribute to the social and economic development of the communities it invests in and serves.

Since 2009, Chinese financiers have contributed a total of $10bn across Acwa Power’s global project portfolio, while Chinese EPC contractors, suppliers, and financiers have taken part in 47 projects, covering landmark renewable and seawater desalination projects worldwide – including the 2,400MW Hassyan power plant in the UAE.

Chief Financial Officer Abdulhameed Al Muhaidib said: “The revolving credit facility by China Construction Bank (DIFC Branch) is an outcome of the ongoing collaboration between Acwa Power and Chinese entities, boosting our near-term liquidity and funding flexibility as we pursue strategic growth opportunities.”

“Most importantly, it goes to show the confidence that financiers have in our business performance and in our ability to deliver large-scale projects of transformative social and economic value. The revolving facility further diversifies Acwa Power’s financing sources and enables it to continue to deliver low-carbon utility infrastructure for regions including the Middle East and Belt & Road Initiative countries such as Uzbekistan and Kazakhstan.”

Yuan Shengrui, Senior Executive Officer of China Construction Bank (DIFC Branch), said the credit facility was reflective of the branch’s interest to strengthen its strategic partnership with Acwa Power and to promote the development of renewable energy projects, in line with the directives of the Belt and Road initiative. He commented that: “By supporting entities such as ACWA Power, we are able to make meaningful impact in the renewable energy sector, and jointly drive positive change for a greener tomorrow.”

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Saipem, a company focused on engineering, drilling, and assembly of major projects in the energy and infrastructure sectors, has secured two offshore contracts worth nearly $550m.

One of these contracts applies to the Middle East, where it ensures the continuity of the ongoing activity of the Perro Negro 7 jack-up drilling unit, by securing a ten-year extension to the existing contract.

According to Saipem, the Perro Negro 7 is a jack-up capable of operating in water depths of up to 375 ft.

The remaining contract is in the Mediterranean Sea, where Saipem has won a contract for the utilisation of the semi-submersible unit Scarabeo 9 for an estimated period of around six months (plus a further, optional period).

The unit is a sixth-generation semi-submersible drilling rig capable of operating in ultra-deep water, at depths of up to 12,000 ft.

A spokesperson for Saipem commented: “The 10-year extension is a record duration in this area, which in the past had only been granted to an international contractor on limited occasions, and further strengthens Saipem’s strategic positioning in the drilling segment. After having recently expanded its presence in the area from three rigs in 2021 to seven expected at the end of 2023 – thanks to the acquisition of various multi-year contracts – with this contract renewal, we see once again the recognition of Saipem’s commitment to executing projects efficiently, with attention to safety and the environment in the “shallow water” market worldwide.”

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Dubai South Properties has launched the third phase of South Bay, the master development located in The Residential District within Dubai South, adjacent to the Expo Road. This follows the successful sellout of the first two phases, which comprised a total of 400 units.

Phase Three features more than 200 residential units with a mix of three- and four-bedroom townhouses, four- and five-bedroom semi-detached villas, and five- and seven-bedroom standalone waterfront mansions.

The townhouses and semi-detached villas will be fitted out to exceptionally high standards, with the interiors featuring marble flooring, built-in fully-equipped kitchens, glass handrails and a rooftop-access sky garden.

According to the developer, once completed, South Bay will boast over 800 villas and townhouses, more than 200 waterfront mansions, a 1-km-long crystal lagoon, over 3km of waterfront promenade, multiple beaches, a school, a clubhouse, and a variety of fitness amenities.

The additional features will include a shopping mall, a spa, kids’ clubs, waterparks, swimming pools, waterfront cafés and a lake park.

Dubai South Properties CEO, Nabil Al Kindi, said: “Since the launch of South Bay, we have witnessed great interest from buyers and end-users, resulting in a successful sellout of the first two phases. The project’s value-added state-of-the-art amenities ensure an exceptional lifestyle for residents at South Bay and Dubai South, and we will continue to enrich the real estate sector with unique developments that contribute to our wise leadership’s vision of making Dubai the best city to live, work and visit.”

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