Investors in Middle East construction projects are likely to benefit from much lower construction costs compared to other global markets, according to an industry survey.
The research, conducted by UK-based project management consultant Turner & Townsend, states that the cost of construction in the UAE currently stands at $1,455 per square metre compared to $3,900 in New York. Furthermore, the rise in construction cost will be just 2% in the UAE and 1% in Oman, compared to the global average of 4.3%.
The low rates are a result of Middle East governments’ efforts to diversify their economies, move away from a reliance on oil and to invest more in construction projects such as the Expo 2020 Dubai, said Alan Talabani, the firm’s regional managing director.
The report, Construction Market Survey 2018, also called for a “worldwide shake-up” of the industry model and for greater collaboration between investors, asset owners and the supply chain, and greater reward for innovation and the delivery of better outcomes.
“In the Middle East, this means greater sharing of risk and reward between clients and contractor, and such steps will help to reduce lengthy disputes and allow clients to get a greater return on investment,” said Talabani.
©2018 funds global mena