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Construction Overview
The UAE construction market is one of the most active Chart 1: Total Estimated Value (in Billion USD) of
markets in the GCC with a large number of high-value Active Projects by Sector in the UAE
projects spread across different sectors. As per the BNC 32.2
Project Intelligence, there is approximately USD 774 billion 51.9
worth of active project investments in the country, of which 85.9
approximately 43% are concentrated in Dubai. The
87.6
construction market serves as a catalyst for economic growth
and diversity through the buildup and improvements of a
city’s infrastructure to create an efficient operating
environment for facilitating business activities.¹
516
The UAE government has outlined a seven-point plan under
Vision 2021 aimed at addressing the social and economic
goals of the country.² Infrastructure is one of the main pillars Industrial Oil & Gas Transport
supporting the national agenda by developing world-class Urban Construction Utilities
facilities, such as new roads, airports and telecommunication
networks, to support the local economy.³ As per the BNC
Project Intelligence, Dubai has approximately 4,332 active
projects, the majority of which are concentrated in the urban Ambitious urban planning initiatives such as the Dubai Urban
construction sector comprising of various project types such Development Master Plan 2020 are a mechanism for realizing
as residential and commercial buildings, hospitals, and hotels. the goals outlined in the UAE 2021 National Agenda.⁴
4,500
350 335 4,332 327.7
4,000
supporting airport expansion projects, while the projected
# of Projects
300
3,500 growth in overnight visitors is expected to support the high
250 3,000
200 2,500
number of active hospitality projects in the city.
2,220 1,996
150 2,000
1,500
100 894
655 1,000
50 399
29.4 27.4
363
500
Chart 3: Total Estimated Number and Values of
29.4 13.4
11.5
0 - Active Projects by Sector in Dubai
Dubai Abu Dhabi Ras Al Ajman Sharjah Fujairah Umm Al
Khaimah Quwain
300 4,000
Estimated project value (in Billion USD) # of Projects 265.8
3,522 3,500
250
# of Projects
200
2,500
Dubai Expo 2020, and smart and sustainable urban planning. 150 2,000
These drivers will continue to support an active construction 1,500
100
market, resulting in a high application of efficient cooling 1,000
technologies such as district cooling and chiller systems. 50 33.5
24.9 236 376 500
191 6.4 4.3 7
0 0
POPULATION – DEMAND DRIVER #1 Urban Transport Utilities Industrial Oil & Gas
Construction
The population of Dubai has been growing at an exponential
Estimated project value (in Billion USD) # of Projects
rate. According to the Dubai Statistics Center, the city has
registered 2.8 million people as of June 2017.⁵ The number of
residents is expected reach 3.4 million people by 2020⁶ and
5.2 million people by 2030.⁷ Moving to Dubai has many
advantages, including a high quality of living and job SMART & SUSTAINABLE URBAN PLANNING
opportunities. The Dubai Expo 2020 alone is expected to add – DEMAND DRIVER #4
300,000 new jobs notably in areas of hospitality and Dubai Government has set in motion an ambitious plan on
construction which are boosting the local GDP.⁸ becoming a leading smart city by 2021. Dubai was the first city
in the world to assess the efficiency of municipality operations
TOURISM – DEMAND DRIVER #2 and their interactions with the community under an initiative
Dubai is one of the fastest growing destinations for overnight led by His Highness Sheikh Mohammed Bin Rashid Al
travelers. The steady rise in tourism activities is driving the Maktoum, Vice-President and Prime Minister of the UAE and
demand for many construction projects, notably in the Ruler of Dubai.¹³ Smart City initiatives focus on addressing the
transport, hospitality, and retail sectors.⁹ Dubai ranks among challenges of a growing urban population such as traffic
the top global destinations worldwide, with an impressive 14.9 congestion and pollution through the buildup of Dubai’s
million overnight visitors registered in 2016 and is on track to transport network and sustainable communities. These
reach 20 million by 2020.¹⁰ The Dubai Expo 2020 alone is initiatives tie into the Dubai Plan 2021 which aims to create a
expected to attract 25 million visitors, 70% of whom are world-class city through empowering themes such as smart
anticipated to come from abroad.¹¹ and sustainable living.
120 2,500
100 (i.e. concept, design, tender, under construction and on
# of Projects
2,000
80 hold). The total estimated value of construction projects
1,500
60 49.2 with HVAC applications is USD 237 billion and makes
43.9
1,000 up over 70% of all project values in the city.
40
579
20 369 9.4 4.8
500 ▪ Despite some market slowdown, approximately 70% of
96 5.1 2.1
21 44 3.9 6 77
0 - all active project values are still advancing, the majority
Buildings Hospitality Retail Leisure & Healthcare Aviation Education Others
Facilities Recreation
Facilities
of which are currently under construction.
▪ There is an estimated USD 74 billion worth of projects
Estimated project value (in Billion USD) # of Projects
in the initial stages of development (i.e. concept,
design, and tender) indicating a steady flow-through of
hospitality, retail facilities, leisure and recreation Chart 6: Total Estimated Number and Values of
facilities, healthcare, aviation, and education. Active Projects by Construction Lifecycle
▪ The remaining 20% of the project values comprise of Stage with HVAC Applications in Dubai
project types that are either less frequent or have
100 93.9 3000
minimal requirements for HVAC systems. These 90
Est. Value in USD Billion
2558 2500
projects include plants, rail stations, oil and gas 80 70.3
70
processing facilities, stadium, theme park and Water
# of Projects
2000
60
Park, zoo and animal reserve, sports club and facilities. 50 1500
These projects are referred to ‘others’ in the graph. 40 33.7
30 25.1 1000
▪ The majority of construction projects are concentrated 20
733
14.4
500
in low-rise, mid-rise, and high-rise commercial and 10 130 268
188
residential properties. 0 0
Under On Hold Concept Design Tender
▪ Dubai has one of the most diversified economies in the Construction
GCC. The city is a strategic business and tourist hub, Estimated project value (in Billion USD) # of Projects
with business-friendly free zones, entertainment
venues, and luxury hotels. The value of active
hospitality and retail projects constitutes over 22% of all
project values corresponding to the HVAC market.
The HVAC market will continue to improve in the near future new project investments that are expected to begin
as work is expected to resume on some of the on hold projects, construction work in the near future. It is also
however market growth will be slower than anticipated due to noteworthy to mention that 21 of the projects under
the high number of construction projects that have been concept or design are worth USD 1 billion or more and
temporarily suspended or put on hold. have a combined estimated value of USD 33 billion.
5
Chart 7: Total Estimated Spend on HVAC Equipment The following analysis is based on BNC Project Intelligence:
and Systems Per Project Type in Dubai ▪ The values of urban construction and MEP contracts
1,200
awarded are proportional to each other (HVAC services
1,037.9 constitute a high percentage of MEP costs). As a result,
Est. Value in USD Billion
1,000
a temporary reduction in the value of urban
800
construction projects awarded will directly impact the
600
demand for HVAC services.
400 ▪ The HVAC market in Dubai is estimated at USD 1.3
251.5
200 billion by the end of 2017 and is projected to grow by
66.6 36.8 31.7 41.9
26.6
0
11.9 6.2 10% over the next two years. This forecast is based on
Buildings Hospitality Retail
Facilities
Aviation Education Leisure &
Recreation
Healthcare Manfacturing
/ Processing
Others
a five-year moving average to determine the year-on-
Facilities Facilities
year values of awarded projects in Dubai’s urban
construction sector.
-13%
systems associated with hospitality and retail projects -1,000 -15%
constitute over 20% of all HVAC project investments in Spend on HVAC (in Million USD) Growth rate (Y-O-Y)
Dubai. The high contribution of HVAC applications in
these two industries is primarily due to a highly active
tourism sector, offering entertainment venues, luxury
hotels and unique attractions that bring visitors from ▪ Among the urban construction projects advancing in
around the world. different stages of development, there are
▪ Airport building terminals, shopping malls have vast approximately 2,258 projects currently under
interior spaces requiring ventilation and cooling and construction, which may create a temporary shortage
typically result in a high application of HVAC services of active projects in the market once these projects are
delivered in multiple packages or systems. One of the complete.
notable airport projects currently underway is the
construction of a Passenger Terminal Building in Al
Maktoum International Airport (USD 1.5 billion).
Conclusion
The HVAC market in Dubai has been growing at a steady pace market, and as a result, the outlook for the HVAC market
due to the high volume of construction projects in the city. As appears to remain positive over the next few years. Dubai has
per the BNC Project Intelligence, Dubai has approximately adopted a series of green building standards and smart city
3,877 active projects with HVAC applications. There is a large initiatives calling for energy efficient solutions, which are
volume of construction activities surrounding the urban shaping the course of the local HVAC market. Advancements
construction sector notably in commercial and residential in technology will improve the operating efficiency of these
properties. The steady rise in new urban construction projects systems leading to a reduction in the cost of energy and
awarded should provide the initial impetus to grow the HVAC carbon footprint.
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