Project Management Industry in GCC
Commercial Real Estate Service
Best Use Studies
Project Closeout Phase
Project & Construction Management
Real Estate Projects
National income averaged 19% growth in the past four years on sharply higher oil and non-oil activity, public spending and domestic conﬁdence.
The Current account and ﬁscal surpluses of 26% and 17% of 2006 GDP respectively, and likely to rise further if high oil prices are sustained and will remain high.
Despite massive spending on projects, GCC governments added almost $500 billion to net foreign assets over the past four years, enough to sustain spending growth for many years.
Investment boom with $1.25 trillion in planned public and private projects will continue to propel growth of the private sector.
Purchasing power sharply higher as per capita GDP averages 15% annual growth over four years despite rising inﬂationary pressures.
Double digit nominal growth continued for a fourth year, albeit short of the 26% high recorded in 2005.
Economic performance above long-term trend
Average real growth in GCC moderated to 5.9% in 2006, but remained more than double its average over the 80s and 90s.
Boom is likely to be sustained for at least 3 more years. The expected 7-year run of above average growth will make it the longest expansion in three decades
Though inﬂation was highest in Qatar (11.8%) and UAE (10%), the two were among the fastest growing economies in emerging markets, with real growth of 8.8% and 10%, respectively.
In 2006, Qatar, UAE and Kuwait continued to climb the world ranks in terms of per capita income.
Yet rapid population growth meant slower per capita GDP growth.
Oil prices expected to remain sufficiently high (WTI over $50) through 2009, guaranteeing continued budget surpluses and fueling spending.
Strong Asian demand, limited spare production capacity and geopolitical risks may propel oil prices beyond 2006 peaks.
The GCC has benefitted from this decade’s buoyancy in oil prices with a staggering windfall in excess of USD 2 trillion, driving real GDP growth at over 8.1% p.a. between 2003-06 (versus global growth of 3.6%). EIU forecasts a 6.2% CAGR through to 2010 implying the region is well set to maintain its growth at healthy levels.
Significant project pipelines: The GCC has USD 1.5 trillion worth of projects in the pipeline over the next 5-7 years with the construction sector expected to account for 66%, while hydrocarbons account for 22%.
Favorable demographics: 66% of the region’s population was below the age of 30 in 2000, with a median age of 21.9 years. KSA has one of the highest numbers of young people (69% below the age of 30). As the work force grows, so will the demand for housing, consumer durables, utilities, mortgage and personal finance.
Construction & building materials: Over 2.2 million new housing units need to be built in the next 14 years to accommodate the projected population of 33.7 million. In addition the construction of the proposed 6 Economic Cities will generate ample business opportunities.
Non-oil economic growth gaining traction
The composition of growth is shifting, with the non-oil sector now becoming a major driver for economic growth. The non-oil sector’s contribution to real GDP growth increasedfrom 49% in 2003 to 84% in 2006. The Gulf’s domestic investments have beenrising consistently and are expected to reach about 50% of non-oil GDP in 2007. Direct foreigninvestment inflows more than tripled since 2003.
Infrastructure investments driving diversification The increased emphasis on diversification of income streams, away from oil, by countries in the GCC region has led to massive spending plans in infrastructure development in theregion. MEED estimates suggest that the GCC region has an estimated USD 1.5 trillion worth ofprojects in the pipeline over the next 5-7 years.
Construction sector accounts for 66% of total GCC project spending in coming years at USD 1.03 trillion–The construction sector in the GCC region has almost doubled since 2000 to reach USD 34.8 billion in 2006 from the level of USD 17.8 billion in 2000 (representing an annual growth of 11.8%). Saudi Arabia, the largest construction market in the region, grew at an average of 6% during the period. If we had to exclude Saudi, the sector has grown at a more impressive 19% p.a. during 2000-2006, driven by UAE which took the lead in terms of launching mega-infrastructure projects. The construction sector’s contribution to GDP in UAE has risen from USD 7.8 billion in 2004 to USD 12.3 billion in 2006.
GCC is a FDI hub attracting 54% of overall FDI in West Asia In 2006, total FDI inflows in the GCC region grew by 23.1% to touch USD 32.4 billion from USD26.3 billion in 2005. Saudi Arabia and UAE have emerged as the top destinations for FDI flows inthe region, together accounting for 82.2% of total FDI inflows. According to the UNCTAD, theGCC countries attracted 54% of total FDI inflows to West Asia in 2006. Saudi Arabia was the second largest recipient in West Asia, with inflows of USD 18.3 billion. UAE was the third largest, with inflows of USD 8.4 billion, going mainly to the country’s free trade zones
King Abdullah Economic City– King Abdullah Economic City (KAEC) is being built by Emaar Economic City (EEC) and is the largest ever developed city in the Middle East. The city is to be developed on 168 sq km area and has six major components – the Port, Industrial District, Central Business District (including commercial, mixed-use, retail and financial island), Resort, Educational Zone and Residential. This implies good potential for banks considering the total investment requirement of USD 27 billion for the project.
Prince Abdul Aziz Bin Mausaed Economic City–The city is expected to be the largest transportation and logistics hub in the region and is likely to see a private sector investment of SR 30 billion (USD 8 billion) in the next 10 years. The city will be developed on 156 sq km area and will incorporate a cluster-based development comprising: transportation, logistics and supply chain centers; educational services; agricultural and food processing services; mining and commerce services; housing; and infrastructure.
Knowledge Economic —The city is developed on 4.8 sq km land but the total built up area is in excess of 9 sq km with an infrastructure spend of SR 25 billion (USD 6.7 billion).
Jazan Economic City Heavy industry will be a key sector for investment in JEC with plans in hand for a privately owned oil refinery, a 500,000 tons per annum steel rebar and DRI factory; a copper smelter and an aluminium complex. The city will also have a desalination plant along with a power plant with a capacity of 4,000 MW. Total investment in the complex as well as in the associated plants is estimated at USD 4 billion.
Residential township projects worth KD 49.5 billion and infrastructure projects worth KD 11.6 billion are expected to be completed within the next five years.
The Public Authority for Housing Welfare (PAHW) is currently implementing 29 housing projects at a total cost of KD 224 million. This involves the construction of 4,460 housing units.
Project Kuwait and the tourism development projects involving the islands of Bubiyan and Failaka. The visionary Project Kuwait, worth KD 2.32 billion, is a strategic project aimed at developing the Northern Oilfields. The estimated KD 1.75 billion development on Bubiyan Island involves the construction of a new port, container terminal, and residential and commercial infrastructure. The project aims to open the port (with a capacity of 2.5 million tons a year) by 2008.
The Avenues is a landmark development in Kuwait’s retail industry. The mall will have around 250 stores, 35 restaurants and cafés, and a 10-screen multiplex. It is built over 425,000 sq. m and is divided into three phases in the Al-Rai area.
Mall of Kuwait and 360° Kuwait by Tamdeen Real Estate Company. Mall of Kuwait will be located in the Sabahiya area, covering a massive retail area of 150,000 sq. m.
360° Kuwait another will be located at the intersection of King Faisal Highway and the 6th Ring Road and will cover a retail area of over 75,000 sq. m
The Hamra Tower, which is expected to be Kuwait’s tallest tower at 412 meters a massive built-up area of over 270,000 sq. m; Arraya II, with about 65,000 sq. m; and Kuwait Trade Center, with 30,045 sq. m.
Qatar’s population is estimated to reach almost 1.6 million people by 2012 (IMF figures) up from the current 907,229. This will be as a result of increased GDP, which has shown double digit growth over the last few years, and the development of further downstream industries creating more jobs.
If a constant rate of growth is assumed, the population would reach approximately 1.17 million by 2012. This means at least an extra 300,000 rooms will be needed. This is not taking into account the increased numbers of tourists and business visitors.
Qatar is heavily dependant on an expatriate workforce, one cannot assume a linear rate of growth. The IMF suggests a sharp increase in population after 2007 to reach almost 1.6 million people by 2012. In this scenario, another 700,000 units would be needed.
In 2007, GDP grew by 12.5%, its slowest rate of growth in 5 years as output of oil and gas slowed. However, this year, (2008) GDP growth is expected to be slightly more at 15.5%.
As the non-oil sectors expanded by 16.8% in 2007, the past year saw the weight of the non-oil sectors in the total economy increase to 44.3%.
Qatar’s construction sector grew 22.04% in 2007 and will probably expand another 24.22% this year
Given current GDP estimates for 2007 and 2008, and assuming real estate continues to contribute around 3% of total GDP, future revenue may reach almost double the 2006 levels by 2012.
More downstream products and industries will develop thus creating more jobs and therefore a demand for housing. This is supported by the $2.6 billion project of Energy City, (located in the Lusail master development) which is exclusively designed for all energy related businesses catering to the commercial, technical and human resource needs of the oil and gas industry operating in the whole of the Gulf region
The Pearl Qatar--This development will cover an area of 4 million square meters at a cost initially described as QAR 9.2 billion ($2.5 billion). Recent estimates have heightened the cost of the project to $9 billion, including sub-developments.
Lusail–Owned by Qatari Diar. This mega project will cover an area of 35 million square meters of land. The final cost is difficult to ascertain as Lusail has been split into 16 zones which Qatari Diar as master developer has started selling off to other developers. This mega project will contain Energy City and Entertainment City, two “themed” areas the energy business and fashion respectively with projected costs of $2.6 billion and $1.5 billion.
Barwa Projects–The largest cumulative amount of land is under management by Barwa Real Estate Company, which has at least 9 projects underway. The total land bank is in excess of 10.34 million square meters, and the value of the projects total QAR 51 billion (just under $14 billion).
Al Waab City–Al Waab City is owned by management companies operating under the Nasser Bin Khaled Group. This will cover an area of 1.2 million square meters at a cost of $2 billion.
The majority of projects are due to be delivered in 2010.
By 2009, The ‘Fox Hills’ area of the Lusail development should be delivered and 17 towers on The Pearl should be finished.
In 2010, a larger portion of the Pearl should be completed, including Viva Bahriya Area, Porto Arabia Villas, The Four Seasons Hotel, and at least 4 towers.
Energy city and Entertainment city in Lusail along with the other districts that have not been launched yet will start in approx 2010 and delivery of units will last until 2015.
The construction industry contributed about 7.05% in 2006 to the UAE’s GDP and was valued at US$11.10 billion in 2006. The growth rate of the construction sector is expected to be 6.8% on average for 2007-2010.
A recent government report outlined that over 1,800 projects, worth around US$27 billion, are currently being carried on in the Gulf region.
The major ongoing projects in UAE are the development of the metro rail system, Burj Dubai, the man-made Palm Islands, Saadiyat island and the Al-Raha beach development.
U A E
The mega infrastructure projects -Abu Dhabi
Saadiyat Island – US$27 billion
The Al Raha Beach Development – US$14.68 billion
Shams Abu Dhabi project – US$6.8 billion
The Abu Dhabi Airport Expansion – US$6.77 billion
The Mohammed Bin Zayed city – US$1.36 billion
The newly announced port and industrial zone at Taweelah – US$2.17 billion
U A E
The mega infrastructure projects -Dubai
The Waterfront Project –US$50 billion
Dubai Marina –US$10 billion
The Burj Dubai Development – US$20 billion
Dubailand – US$5 billion
International City – US$2.5 billion
Dubai Healthcare City –US$1.8 billion
Bawadi –US$54.4 billion
U A E
Airport Construction And Related Works:
Dubai will invest around US$81.7 billion in the aviation sector between 2006 and 2016
Abu Dhabi Airports Company (ADAC) has lined up US$8.16 billion redevelopment program for the Abu Dhabi International Airport.
The Dubai Metro will be a driverless, fully automated metro network under construction in Dubai. The Dubai Metro system will be the longest fully automated rail system in the world.
U A E
“Park Towers, DAMAC Heights and Gamsha Bay are some of our key projects,” of DAMAC Properties, which has projects over $ 40 billion in hand
Motor Cityis a development across 38,000,000 sq ft in Dubai land, based on a unique automobile and motor.
“Dubai Silicon Oasis aims to be the world’s leading centre of advanced electronic innovation, design and development,” the total scope of development by DSOA and developers for the coming 15 years is AED 26 billion.
Marina 101, a one-of-a-kind hotel and hotel apartments development with a 101 floor hotel by Sheffield Real Estate. “Other top projects include a 45-floor corporate office tower in Jumeirah Lake Towers and a shopping mall with five floors in Majan-Mizin.”
The Wave, Muscat. The total value of the development is just over $ 2 billion.
Critical Success Factors
Superior Project Management is the use of the right processes by the right people.
Highly successful companies work “smarter”, that is, they do things, which are efficient and effective.
Financial Management and Schedule Managementare the two keys to a successful project.
Success often comes in giving everyone information so they may do their job.
Great people come from everywhere; those who are trained to succeed perform consistently well.
Follow-up is a key to success.
Simplicity means speed.
Measurement is not an opinion. It seeks facts and verifies results.
Critical Success Factor- Project Management
Organizational culture supports project management
Have a Formal Process to Define Vision
Business Need Linked to Vision
Business Need Linked to Vision
Match Changes to Vision
Common Threads for
Management’s Seven Deadly Sins:
Mistaking half-baked ideas for viable projects
Dictating unrealistic project deadlines
Assigning under skilled project managers to high-complexity projects
Not ensuring solid business sponsorship
Failing to break projects into manageable ‘chunks’
Failing to institute a robust project process architecture
Not establishing a comprehensive project portfolio to track progress of ongoing projects”
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