Meed | Gulf projects market dips as GCC sheds value

Gulf projects market dips as GCC sheds value

20 February 2023

The Gulf Projects Index fell by 2.2 per cent in the four weeks from 13 January to 10 February, plummeting by just shy of $70bn, from $3.2tn to $3.1tn, according to regional projects tracker MEED Projects.

The drop was led by the GCC, which lost 2.9 per cent in value, or $75bn. This fall was only marginally tempered in the index by a 1.8 per cent, or $5.1bn, rise in the value of Iran’s projects market.

Among the GCC states, Kuwait saw the sharpest decline, shedding 10 per cent of its overall market value, or $19.7bn. This was led by the status of the $14bn Al-Khiran residential city development being changed to on hold.

Qatar’s projects market shed 8.8 per cent, or $17.5bn, of its overall value, led by adjustments to the valuation of work on the Qatargas North Field East expansion and phase two of the Hamad International airport expansion. Projects collectively worth billions of dollars were also completed in Lusail, Doha.

The UAE experienced the next most significant decline percentagewise, at 6.1 per cent, as well as the largest decline in value, with $34bn being wiped off its $559bn projects market to land it at $525bn. This was led by major re-evaluations of the value of project activity at Al-Reem Island and Yas Island in Abu Dhabi.

Saudi Arabia’s projects market also declined by a more marginal 0.5 per cent, or a net value of $7bn, led by adjustments to the valuations of work on King Abdulaziz International airport. The main contract for The Avenues mall in Khobar was meanwhile revised upwards to $1.9bn.

Modest growth

Bahrain, by contrast, experienced a 3.3 per cent increase in the size of its projects market, which accrued $2.1bn in value. This was principally due to the re-activation of four island development projects, each with a $500m budget, by the Bahrain Economic Development Board: Gulf of Bahrain, Suhaila Island, Fasht al-Adhm Island and Fasht al-Jarim Island.

Oman’s projects market grew by a more marginal 0.7 per cent, adding $1.3bn in value due to the launch of new projects.