Expo progress will reverse declining sentiment

11 December 2014

Construction companies are less optimistic about the future as 2015 approaches

When Dubai was selected to host the 2020 World Expo in November 2013, the decision was met with great enthusiasm by the emirate’s construction sector.

At the start of 2014, firms were expecting a bevy of new projects and almost guaranteed growth in the run-up to the event, and at long last they hoped they consign Dubai’s real estate crash and debt crisis to history. Much has changed in the year that followed and the memories of the past are starting to haunt construction companies once again.

Although there has been planning behind the scenes, construction work directly related to the Expo is still some way off being tendered. In the meantime, new regulations have cooled Dubai’s overheating property market, oil prices have fallen sharply, the stock market has fallen abruptly, and concerns about Dubai’s ability to fund its future projects grow stronger.

The recent appointment of US-based CH2M Hill and UK-based Mace Group as the programme management team and the selection of US-based HOK and UK-based Arup for the design of the development earlier this year for Dubai Trade Centre Jebel Ali, which contains the Expo site should convince companies that while construction has not yet began, the preparations for the event are moving ahead.

Next year, work on the masterplan will be completed and construction on the Expo site can begin in earnest. By then, the enabling works will have started for the $33bn expansion of Al-Maktoum International airport along with other projects in the Dubai World Central district and the Jebel Ali area.

Delivery will be the yardstick for success in 2015 and 2016. If these schemes move forward according to schedule, then they will reverse the decline in sentiment that the market has experienced during the course of this year. If they are delayed, then the doubts will only grow stronger.

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