With more than $490bn-worth of real-estate projects on hold across the GCC, following the slump in the region’s property markets, contractors are increasingly looking to hospitals, schools and university projects to provide new business opportunities.

According to regional projects tracker MEED Projects, there are currently $31.9bn-worth of university projects planned or under way in the GCC. The most active market by far is Saudi Arabia, which accounts for 58.4 per cent of the region’s investment in higher education establishments. The combined value of the university schemes planned or under way in the kingdom is $18.6bn.

University schemes

The two largest university projects under execution are the multi-billion dollar Princess Nora bint Abdulrahman University for Girls and King Saud University schemes.

The Princess Nora project is to replace the former women-only Riyadh University, which opened in the 1970s. It entails the construction of 22 new colleges, a 700-bed hospital, a central library, conference centres, laboratories, administration buildings, accommodation blocks and a monorail system to link the 8 million-square-metre development.

King Saud University, which dates back to 1957, is also being upgraded. A new women’s college is being added and residential facilities are being built. In addition, a host of other smaller projects are in the design or execution phase in Saudi Arabia. These follow the completion of the $2.6bn King Abdullah University of Science & Technology in 2009.

Kuwait is the second-largest market for university projects with $5.3bn-worth of schemes planned or under way. The largest scheme in Kuwait is $3bn Sabah al-Salem New University, which is to be located in Shadadiyah, 20 kilometres west of Kuwait city. Prequalification is currently in progress for contracts to build the various departments of the university.

After Kuwait and Saudi Arabia, the UAE has the third-most university schemes by value planned or under way in the GCC, worth a total of $5bn. Most of these are being built in Abu Dhabi. The Abu Dhabi state-owned investment vehicle Mubadala Development Company is developing three new universities: The $1.5bn New York University; the $900m New Zayed University Campus; and the $400m Paris-Sorbonne University campus on Reem Island.

In April, the local/UK Al-Futtaim Carillion was award the contract to design and build the New York University on Saadiyat Island. It will have lecture theatres, IT buildings, a library, laboratories, accommodation and sports facilities. Construction work is scheduled to begin in the third quarter of 2010, with the completion date set for early 2014. The local Al-Habtoor/Murray & Roberts joint venture is the construction contractor for the Zayed University and the Paris-Sorbonne University campuses.

Qatar, meanwhile, is reaching the end of a wave of university construction projects at its Education City complex on the western edge of Doha. Education City is being developed by the state-backed non-profit organisation Qatar Foundation for Education, Science & Community Development. The local Midmac Contracting Company is set to complete later this year the $154m School of Foreign Service for Georgetown University. The contract to build Northwestern University is expected to be awarded by the end of July. Six US universities have opened branch campuses at the 14-square-kilometre site that comprises Education City.

Healthcare projects

When it comes to hospitals, the UAE, and Abu Dhabi in particular, has the most hospital-related projects in the pipeline, worth a combined $5.3bn, or 39.4 per cent of the GCC total.

The largest hospital scheme by value under way in Abu Dhabi is the AED4.7bn ($1.3bn) 364-bed Cleveland Clinic, which is being built by a joint venture of the local/Belgian Six Construct Abu Dhabi and South Korea’s Samsung Corporation. This project is also being developed by Mubadala Development Company, through its subsidiary Mubadala Healthcare.

The other schemes in the emirate are being executed by Abu Dhabi Health Services Company, which is both building new facilities and expanding existing hospitals. In December, contracts for the enabling works packages for the 690-bed Al-Ain and Mafraq hospitals were respectively awarded to Austria’s Strabag and Swissboring, part of Italy’s Trevi Group.

By far the largest hospital project in the GCC is the $2.3bn Sidra Medical & Research Centre in Doha. The hospital, designed by Argentinean architect Cesar Pelli, will initially house 412 beds, but has the infrastructure to expand to 550. A joint venture of US-based Contrack International and Spain’s ObrasconHuarte Lain are building Sidra and the completion date is slated for 2012. The facility is being set up with a $7.9bn endowment from the Qatar Foundation. It is believed to be the largest endowment ever given to a private hospital.

Also under construction in Qatar is the Ear, Nose and Throat hospital at Hamad Medical City, the centre for public healthcare provision in the country. The $1.1bn hospital is being built by Hyundai Engineering & Construction.

In total, there are $13.4bn-worth of hospital schemes planned or under way in the GCC. Oman has the fewest hospital projects of the six member states, with just the Sultan Qaboos Cardiac Centre in Salalah and the National Heart Centre in Seeb under construction.

Schools market

The size of the GCC schools project market is much smaller with just $3.2bn-worth of projects planned or under way. Qatar, Saudi Arabia and the UAE have the most projects in the pipeline, according to MEED Projects. Oman, once again, is the least active market.

Since the global economic crisis took hold at the end of 2008, the region’s governments have stepped up their investment in hospitals, universities and schools to help stimulate activity in the construction industry, allocating larger portions of their state budgets to these areas. 

The schemes have certainly given a lift to the construction sector, during the liquidity crisis, but they cannot replace the hole left by the billions of dollars-worth of real estate projects that have been put on hold across the region, as the value of social infrastructure schemes are generally much smaller. Contractors will be eager for recovery in the property markets to ensure lucrative contracts come their way again.