$601bn: Combined budget value of real-estate schemes in MEED’s 2011 projects ranking
$756bn: Combined budget value of real-estate schemes in MEED’s 2010 projects ranking
Source: MEED Projects
The latest MEED ranking of the largest projects in the Middle East has seen a marked shift towards hydrocarbons and public infrastructure developments, due to several private sector real-estate schemes being put on hold or cancelled.
Sixteen projects that featured in last year’s MEED Top 100 Projects list, with a combined budget value of $228bn, have exited the list. Among these, Saudi Arabia’s Princess Nora bint Abdulrahman University for Women and the Borouge 2 expansion in Abu Dhabi, have been completed.
The number of real-estate projects in the Top 100 has fallen from 49 to 42 this year
This year’s ranking, which is made up of 105 projects due to seven projects having the same value, reflects the impact that the global downturn has had on large real-estate schemes in the region. Spending with the new entrants has shifted towards oil, gas and petrochemicals facilities and state infrastructure projects.
New entrants to the Top 100 Projects
The six new hydrocarbons entrants have a combined value of $60bn, while the seven government-backed projects, comprising a mix of social housing developments, hospitals and roads and transport are worth $42bn. The only other new entrant in the list is Qatar’s planned stadiums for the 2022 Fifa World Cup.
Of the 14 projects cancelled or on hold since last year, all except one are in the real-estate sector, with seven coming from the UAE, reflecting the ongoing construction downturn in the country. Despite this, the UAE retains the number one position in terms of value of all projects on the list. Some developments exiting the list included partially completed megaprojects, such as Business Bay and Festival City in Dubai.
Projects on hold within the Business Bay development include the high-profile Michael Schumacher Business Avenue and Boris Becker Tower Akar Properties’ Singapore Towers, Sky Villa and Canada Business Centre Tower and Iris’s Ora and Crystal developments.
At the Dubai Festival City scheme being developed by local Al-Futtaim Group, much of the construction work has been completed. The $150m Marriott Vacation Club has been cancelled and the Four Seasons Hotel and W Hotel, with a combined value of $330m, are on hold.
The highest value project to have been cancelled or put on hold, was Madinat al-Hareer (City of Silk) on Subiya Island in Kuwait.
In January, MEED reported that plans for the $77bn megaproject had been cancelled, with Canadian company Malone Given Parsons asked to draw up a replacement masterplan. The scaled-down Subiya Urban Development is in the early stages of planning. Although a value has yet to be given, a source close to the project says it will be considerably lower than that of the City of Silk. Key to the Subiya Urban Development scheme’s success is the delayed Subiya Causeway, which will connect the island to Kuwait’s mainland. The $3.7bn bridge is currently under tender and progress with Kuwait’s offshore real-estate schemes will depend on its execution.
While the largest project by value remains unchanged, the total value of the Top 100 projects this year has fallen. Last year, the combined value was $1,257bn, but in 2011, this has dropped by $50.7bn to $1,206.3bn. The five largest projects by value in 2010 totalled $284bn, but this is now down $37bn to $247bn.
As expected, the main downward trend in value across all countries was seen within real-estate developments. This year, real-estate projects have a combined budget value of $601bn, accounting for almost half the total value of all projects in the list. Last year, real-estate projects had a combined value of $756bn, accounting for 61 per cent of the ranking’s total value.
While some of this change is down to the revision of budget values as projects move further on, the core changes in this year’s real-estate list saw one of the projects increase its budget fivefold. As plans became clearer, MEED Projects revised the budgeted value of the Lusail mixed-use development in Qatar up from $6.3bn to $33bn.
The number of real-estate projects in the Top 100 has fallen from 49 to 42 this year, and the UAE continues to dominate, with 21 projects worth a combined $319bn. The Saudi real-estate sector was the next highest by value, at $219bn. The UAE continues to dominate the complete list across all industries for both value and the number of projects, with Saudi Arabia a close second. However, while the value of projects in the UAE has dipped, from $533bn in 2010 to $502bn in 2011, in Saudi Arabia, the reverse is true.
The kingdom has seen the value of its projects in the ranking rise, from $402bn in 2010 to $444bn this year. Qatar also saw a $17bn increase in the value of projects, while Oman witnessed a $4bn increase. These are the only GCC countries that saw project values rise. The other three – UAE, Bahrain and Kuwait – all saw a fall, with the later in particular suffering due to the cancellation of the City of Silk project.