Drees & Sommer expects stronger construction market in 2019

Greater upfront capital investment expected on new projects

Drees & Sommer Middle East (D&S) expects the regional construction sector will offer greater opportunities for the digitisation and revitalisation of built assets, and the use of adaptive modular design as a construction tool.

The firm predicts increased momentum in the construction industry driven by long-term economic diversification plans, including Abu Dhabi Vision 2030 and Saudi Vision 2030. In its statement, the company said it believes these agendas will develop sectors such as hospitality, healthcare and infrastructure.

D&S also said that tourism and gradually stabilising oil prices will contribute to higher capital spend on construction projects in the region over the coming year.

“Although the real changes will happen over the next ten years, higher capital spend in 2019 on construction projects throughout the region will likely draw an increased focus on ROI for developers and investors. Adaptive modular design and digitisation at planning stage and revitalisation at the operation phase are the frontrunners to enable increased ROI. The Middle East’s construction industry is currently far less digitally developed than those in other parts of the world, presenting a key opportunity for growth,” said Stephan Degenhart, associate partner at Drees & Sommer and MD of the Middle East office.

According to a statement from the firm, Saudi Arabia and the UAE will continue to be the largest regional markets and are expected to award contracts valued at over US$320 billion over the next twelve months.

Degenhart added, “Greater attention will be given to projects throughout the three stages of the construction process: planning, build and operations, with particular emphasis on early adoption in the planning stage or even phase zero. This will provide greater opportunity for the integration of digitalised adaptive modular solutions to ensure longevity, flexibility and ROI. Key digital trends such as 3D printing, 3D laser scanning, digital pre-fabrication and continuous advances in BIM will begin to make more of an appearance within the regional construction sector as it continues to develop and shift in focus towards a more digital future.”

He also said that markets such as the UAE and Saudi Arabia will have different requirements to markets such as Egypt and Oman, as those countries’ economic diversification agendas focus more on transport and infrastructure. Additionally, Degenhart said greater upfront capital investment will lower the need for cost-cutting as Drees & Sommer expects to see opportunities for longer lifecycles for buildings to become more of a priority, with higher-quality and smart materials being implemented. These shifts will contribute to more sustainable solutions and align with various governmental initiatives such as Expo 2020 Dubai, Saudi Vision 2030 and Dubai Clean Energy Strategy 2050.

Filippo Sona, MD, Global Hospitality at Drees & Sommer commented, “The GCC hospitality sector is currently going through a period of stabilisation, with occupancy levels remaining strong and average room rates unchanged year on year. Despite the hospitality sector already generating a healthy volume of business, hotels will need to develop strategies to become more efficient and stand out if they want to remain profitable and achieve better ROI. As certain markets place greater emphasis on developing their hospitality sectors, there will be higher demand from investors to create smart buildings that are more adaptable to user needs. Smarter engineering designs have provided new means of increasing ROI and market attractiveness, through a range of user-centric and energy-saving features such as smart parking and automated lighting and air-conditioning.”

According to Sona, the hospitality sector is likely to see more opportunities for revitalisation projects, as 67% of hotels in Dubai were constructed over a decade ago and are nearing the end of their expected lifecycles, according to Sona. He pointed out that ageing hotels will need to refurbish in order to cope with new market supply and become better equipped to attract an increasingly price-sensitive audience.

0 0 vote
Article Rating


Most Popular

To Top