The outlook for the regional construction market has changed dramatically over the past year as Saudi Arabia starts to move forward with a new wave of megaprojects. At the same time, new technologies have created the opportunity for the industry to deliver enhanced services and final products.
Consultants have been the first to be engaged with the new Saudi projects. Firms have been appointed to help establish project management offices (PMOs) to oversee how government agencies manage their capital expenditure and deliver megaprojects.
“The PMOs are very important,” says Gregg Welch, senior vice-president and built environment division manager at Parsons. “At the very front-end you need really smart people who can devise how these cities are going to be established. There is a lot of technology that needs to be brought into these cities. It is important to maximise the application of technologies today at the very front-end.”
Traditionally construction has been slow to adopt new technology.
“It is behind the curve, but we are starting to see movement in the construction world,” says Welch. “We are going to see much more traction over the next five years than we have seen in a very long time. We are on the cusp of a lot of that injecting itself into the construction industry.”
Technology can be used to improve how projects are delivered and how they operate once completed.
“What clients are looking for is to maximise the use of technology to make the developments more user friendly, more economical to build and more economical to maintain,” explains Welch. “So exploring areas of modularisation, 3D printing and other technological changes to the way things are built is of huge interest to these clients.”
The emphasis on technology comes at the same time as a shift in the market as political pressure causes quality of delivery to become more important.
“In Saudi Arabia in particular, there is ample opportunity for quality providers,” says Welch. “They are focusing on quality not quantity, because the things they are doing are so fundamental to moving their country forward that they cannot afford to not have the right people at the helm.”
The uptick in activity in Saudi Arabia means it will compete for regional resources with ongoing projects in Dubai and Abu Dhabi.
“The UAE will continue to perform – Dubai is always going to be Dubai and hold its own,” says Welch. “Right now, we have Expo 2020 driving a huge part of the development, and post-2020 you will see an increased appetite for investment.
“The mix of products on the market has to adjust to potential buyers. You still have a market for the higher end and the mid-range, but the mid-range and lower range will capture most of the market because there is a scarcity there. However, I think the market will remain strong.”
There is also demand in the UAE capital.
“Abu Dhabi has a need for mid-range products and we will see more of that,” says Welch. “The prognosticators have bullish indicators for Abu Dhabi going forward, and I think we will see an uptick over the medium term.”
Across the region, consultants expect to win work on one of the main priorities for policy-makers today: social housing. To meet demand, governments are planning large-scale housing projects, and, due to their scale, clients want to work with firms that offer a suite of services that can be utilised throughout the lifecycle of the project.
“We are uniquely positioned as we have end-to-end solutions,” says Welch. “We consider ourselves to be a solutions provider, so we can provide from the very early stages of planning through masterplanning, urban development, the actual villa design, construction supervision and infrastructure.”
The completed asset is also featuring more in clients’ plans.
“We have seen an increase in clients’ focus on operation and maintenance (O&M) for a couple of reasons,” says Welch. “Firstly because of the financial outlay required for the entire lifecycle of the development, but also because the O&M is closely related to whatever technology is applied at the beginning.
“If you are not looking at the O&M, you are not considering the technology that could be appropriately integrated into the design and approach to development.”