Receive Updates by Email:

Thursday, October 8, 2009

Construction costs fall steeply in Qatar

08 October 2009
DOHA: Construction costs have come down almost 25 to 40 percent since early last year when the industry was booming.
Reliable sources in the building industry say the cost of construction being quoted in tenders has now slid to around QR4,000 per square meters for high quality construction.
The rates until late last year before the onset of the global recession hit the real estate sector were between QR5,000 and QR6,000 per square meters for high-quality building projects.
The rates apply to both government and private projects. As for projects that do not focus so much on quality, the rates could be much lower, say sources.
"AS we know, there has been a slowdown in the industry as compared to last year and it is clearly reflected in the rates contractors have now been quoting in bids for private as well as state projects," said a source in the building industry.
At least 60 percent of a project's costs go towards buying building materials, while the remaining 40 percent is spent on hiring labour, among other things. It also includes the contractor's margins.
The sector has now begun showing some recovery. The demolitions being carried out in some areas of Doha (a reference to Al Musherib area) might refuel construction boom as they would eventually pave the way for new constructions to begin, sources said.
"This (demolitions) is a way to bring buoyancy back to the building industry as new projects are launched on razed sites," said a source.
Asked how the increased steel prices were going to affect the construction sector, he said the hike had not actually made much difference since the demand for basic building materials such as cement and steel remain much subdued as compared to last year during the peak of the boom.
"Since not many new projects are being launched now, the increased rates of steel, or even cement for that matter, do not mean much as the demand remains lower," said another source.
According to him, people in the industry are, however, surprised by the steel price hike because of the demand being low. "I think the move has to do with the global trend. Steel prices have lately being going up in the international market, having plummeted late last year," said the source.
But locally, the prices of steel might have been raised because of the removal of government subsidy.
The development (removal of subsidy) is a welcome sign because it at least signals that the local construction industry is limping back to normalcy with the worst phase being over.
By Mohammed Saeed
© The Peninsula 2009

UAE real estate market dynamics get greener

08 October 2009Closing message at Cityscape Green Day Conference urges developers to 'LEED' by example - private sector 'lagging behind' needs 100% mindset change
Sustainable construction standards should no longer be seen as a choice but the norm, delegates heard during the afternoon session of the first Green Day to be ever held at Cityscape Dubai, which concluded today (Thursday 8 October 2009)
Habiba Al Marashi, Chairperson, Emirates Environmental Group and Board Member, UN Global Compact, said a 100% mindset change was necessary to reduce carbon emissions and encourage best practices industry wide.
"It's not just political will, leadership should be taken by the private sector which is one of the sectors lagging behind," she said.
But Saeed Alabbar, Mechanical Engineer, Halcrow International, recognised a mindset has taken place in the UAE market. "It was all develop-to-sell in the boom, the end user was so far removed that we all thought the customer was the developer. Thankfully, that paradigm has shifted, and we're seeing a develop-to-manage mentality and sustainability is coming more to the forefront."
"Apart from tougher regulatory standards, enlightened property owners will be key as well," said Chris Speller, Group Director, Cityscape.
"For many property owners it is as much about managing running or operating costs as reducing their carbon emissions, but there is a sound business case for sustainability. During the boom, developers had no financial incentive to go green. However due to changing market dynamics, developers now need a competitive edge. Adopting a sustainable design not only reduces carbon emissions, it can lower maintenance and utility costs as well as increase the lifecycle of the building and therefore present a better return on investment for the building owner," added Speller.
Dr. Mohammed Dulaimi, Professor, The British University in Dubai, said enlightened companies saw environmental sustainability as a trigger for innovation. "Investing in a building now will enhance your competitiveness."
Richard Smith, Technical Director for Atkins and Group Chairman of Carbon Critical Buildings, said he is seeing increased interest locally in concentrated solar power and that, despite the region's high carbon footprint, potentially the UAE is a very sustainable place in future.
The earlier session discussed which rating system is best for the Middle East - LEED, Estidama or BREEAM Gulf. As befits its east-meets-west geography, the region is one of the few globally to have such a cross-section of standards.
"They are all good products and formulated on the same principles but the devil is in the detail and we have inconsistency which needs to be cleared up," said Smith.
For full details of Cityscape Dubai 2009 and its events, please visit:
About CityscapeCityscape, organised by IIR Middle East which is part of Informa plc, encompasses a series of exhibitions and conferences that take place in Dubai and Abu Dhabi; Asia; Saudi Arabia; USA; Latin America; and India.
Media contactNathalie ViseleShamal Marketing CommunicationsDubai Media City, United Arab EmiratesTel: +971 4 365 2711Cell: +971 50 457 6525Email:
© Press Release 2009

V-shaped economic upturn expected in Dubai next year

Emirates Business 24-7, 08 October 2009As economic recovery gains steam, a top official of Dubai Chamber of Commerce and Industry (DCCI)Dubai Chamber of Commerce and Industry (DCCI) expects to see a V-shaped recovery in the UAE next year."Our research indicates that the UAE will see a robust growth in 2010. The decline in the country's GDP will be limited and we expect a V-shaped recovery next year," said Hamad Buamim, Director-General of Dubai ChamberDubai Chamber."[The] impact on Dubai was not as severe as it was expected to be," he said, adding that "long-term outlook has improved considerably and expectations of liquidity and access to financing also look better."His view is shared by leading analysts in the country."On current trends, it looks as though we are on a V-track recovery in terms of national income. A low baseline effect will also flatter annual growth figures from the fourth quarter onwards," Dr Giyas Gokkent, Chief Economist of National Bank of Abu Dhabi (NBAD), told Emirates Business.Talking about the W-shaped recovery, he said: "W is the possible double dip in economic activity that may occur once one-off stimulus/policy measures end. Policymakers are displaying a strong preference to err on the side of growth."Early reversal in the policy course appears unlikely for the time being. It would have been easier to have greater conviction on a V-shaped recovery if the crisis had been country specific," said Gokkent.Worldwide, many experts are claiming that the worst is far from over. Most recently, Michael Geoghegan, Chief Executive of HSBC, said he fears a second downturn and is cautious about growing too fast.The UAE, which is linked to global happenings, will reflect what happens on the broader scenario but could be more buoyant."The UAE is interlinked to the rest of the world through a number of channels. One link is oil. The United States accounts for 25 per cent of global oil consumption, while roughly 30 per cent of UAE nominal GDP is based on hydrocarbon activity."Another link is exchange rates. A potentially stronger dollar would translate to a stronger dirham versus major currencies and could be detrimental to non-oil economic activity."A third link is interest rates. The fixed exchange rate of dirham vis-à-vis the dollar means that under normal circumstances interest rates in the UAE mirror those prevailing in the dollar markets."
By Shuchita Kapur
© Emirates Business 24/7 2009