It was perhaps appropriate that it was the Gulf's largest real estate development so far, the $86,000 million Madinat Hareer (Silk City) in Kuwait, that pushed the total value of projects tracked by MEED Projects above $1 trillion for the first time in mid-April. For since the tracking service was launched in September 2004, mega real estate developments planned by the likes of Nakheel in Dubai, Abu Dhabi's ALDAR Properties and Qatari Diar Real Estate Investment Company have driven the Gulf projects market to ever greater heights.
Today, the construction sector, which includes real estate, accounts for just over half of the total value of the region's project market at about $545,000 million. Of this, $525,000 million is to be found in the GCC, with the remainder split between Iran and Iraq. Although many Gulf cities already resemble building sites, the construction boom remains in its early stages. Close to two-thirds of the GCC construction projects are still in the planning stage, with a further 20 per cent out to bid. Just 15 per cent of the GCC total is actually under construction. The MEED Projects data highlights the different stages individual markets are at in the construction cycle. While the UAE has the highest value of construction projects, at $225,000 million, about 60 per cent is either under construction or out to bid, with the remaining 40 per cent at the planning or design phase. Much of the planned work is in Abu Dhabi, which has a raft of mega real estate projects at an early stage of implementation. Percentage-wise, Saudi Arabia and Kuwait have the most work to do. In the kingdom, 81 per cent of the construction total, equivalent to $47,500 million, has still to move into the bidding phase. In Kuwait, the backlog of work is even greater: just 2 per cent of the total of $143,500 million has moved on site, with a staggering 95 per cent, including Silk City (inset), still on the drawing board. Despite record crude prices and record investment in new capacity, the total value of the Gulf's oil and gas projects market is less than half of construction, at $228,000 million. The sector, however, has a far more balanced look to it. Of the oil and gas projects' total, $81,000 million worth are under implementation, with a further $32,000 million worth out to bid. In terms of value, Qatar has the largest oil and gas projects market at $60,000 million. More than 75 per cent of the total is made up by its four mega liquefied natural gas (LNG) projects, all of which have been awarded over the past 18 months. Saudi Arabia comes in second at $40,000 million, a figure that is expected to grow as a raft of major refining projects at Yanbu, Jubail and Ras Tanura are firmed up, along with yet more oil developments, such as the one at the offshore Manifa field. Petrochemicals is the only other sector to have more than $100,000 million-worth of project work. Saudi Arabia is the biggest market,with more than $30,000 million worth of projects in the pipeline, followed by Iran and Qatar. Double-digit growth in electricity demand has seen the total value of Gulf power projects reach almost $70,000 million, while a new round of planned aluminium investment, this time in Oman, Qatar and Abu Dhabi, has driven up the industrial projects figure to $44,000 million. The growth in the GCC projects market has been nothing short of phenomenal over the past three years. In 2002, it yielded contract awards totalling just $10,000 million; in 2004, it jumped to about $35,000 million. Last year, the figure shot up to above $60,000 million. And as the latest data from MEED Projects highlights, much more can be expected in the years ahead, as the Gulf projects boom rolls on.