Register for MEED’s 2023 construction summit

21 February 2023

Register now

After several challenging years, the Middle East and North Africa (Mena) construction industry is starting a new era of spending.

The need to meet the expectations of growing populations is driving investment in transport infrastructure, housing and power and water capacity. At the same time, governments are investing in industrial, digital and logistics capacity to support the growth and diversification of the regional economy.

Inspired by powerful national visions, construction spending is surging across the region, led by huge masterplan developments in Saudi Arabia, Egypt, the UAE, Qatar, Kuwait and Iraq. But as well as new opportunities, the surge in activity also raises new challenges.

MEED’s Mena Construction Summit 2023 examines the trends, opportunities and challenges for construction companies and their suppliers in the Middle East.

Decarbonisation agenda

New factors are reshaping how projects in the Middle East are planned, delivered and operated.

In November 2022, Egypt hosted the 27th instalment of the UN climate change summit, Cop27. This year, from 30 November until 12 December, the UAE will host Cop28. Decarbonising the economy is at the top of the regional policy agenda and is set to transform project delivery in the region.

As the biggest consumer of raw materials, generating between 25-40 per cent of the world’s carbon dioxide emissions, the construction industry is vital in the drive to achieve net-zero carbon emissions by 2050.

The Mena Construction Summit 2023 examines what the decarbonisation agenda means for the Middle East construction industry and discusses ways to reduce the carbon footprint of its people, plants and materials.

Smart construction

Covid-19 has turbocharged the digitalisation of the region's construction industry, and project sponsors and construction clients today expect digital data and smart technology to drive efficiency, safety, sustainability and whole life-cycle profits.

Technologies such as 4D and 5D building information modelling (BIM), digital twins, cloud-based project controls, artificial intelligence (AI), robotics, 3D printing, internet of things (IoT) and big data analytics are no longer ‘nice to haves’. They are essential to be competitive.

The Mena Construction Summit 2023 explores how new technology is transforming project delivery and redefining design and construction, while at the same time reducing waste and environmental impact.

At the heart of the Middle East construction community

After a successful third edition of the summit in 2022 that boasted over 1,000 attendees representing the biggest regional construction companies, the fourth edition of the Mena Construction Summit continues to support the construction ecosystem for smart and sustainable cities and help firms change their operational dynamics.

Bringing together key players from across the construction value chain, the event will showcase some of the latest research and innovations driving improvements in productivity, quality, reliability, cost-savings, waste-reduction and energy efficiency and how you can employ these methods in your projects.

Join us in person for the fourth edition of the Mena Construction Summit on 7 June 2023 as we explore the many ways of using innovation and technology to construct sustainable buildings of the future. An immersive agenda with interactive panel discussions, fireside chats and keynote presentations will offer the unmissable opportunity to discuss and examine case studies from the region’s greatest gigaprojects.

Participants attending include representatives from important government stakeholders, project owners, contractors, architects, engineers, consultants, digital technology and equipment providers and software solution companies.

This is an exclusive opportunity to network in person with high-profile individuals, deepen your understanding of the construction sector in the Mena region and make the right investments, while ensuring better project delivery and finding future growth opportunities.

Register now

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MEED Editorial
Related Articles
  • Region heads for hotel boom

    28 March 2024

     

    This report on hotel investment also includes: GCC becomes a top tourist destination


    Alongside the major infrastructure and construction schemes currently under way in the region, contractors in the Middle East and North Africa (Mena) are looking forward to a significant inbound spree of hospitality-linked project work.

    A combination of government-led touristic masterplans – led by expansive and ambitious schemes in Saudi Arabia – alongside private sector investment in individual hotels and resorts has led to the build-up of a $54bn pipeline of hospitality-linked projects in the pre-execution, study and planning stages across the Mena region, according to regional projects tracker MEED Projects.

    With this ramp up in planned hotel schemes, the region is now leading the global recovery in tourism projects, in a reflection of broader travel trends that have seen tourist arrival numbers grow to exceed pre-pandemic levels by 22%, according to GlobalData.

    Projects under way

    The $54bn project pipeline compares to a value of $22.7bn of work currently under execution in the region, and a long-term tally of $95.4bn-worth of hotel and resort project contract awards over the past decade and a half.

    In contrast to the pace of activity since 2009, however, the region’s upcoming projects are set to be delivered in a much tighter timeframe. Almost the entire $54bn-worth of planned hotel and resort projects is scheduled or expected for award before the end of 2025 and set to be completed in advance of 2030.

    This sets the stage for an intensified period of hotel investment and development over the next five years that could surpass the last investment boom cycle in 2014 and 2015, when hotel project award totals reached $9.1bn and $10bn, respectively.

    Since 2009, the average annual value of hotel and resort project awards has been $6.4bn, with activity waxing and waning over the intervening period. Hotel and resort schemes fell away dramatically in 2020 amid the Covid-19 pandemic, with awards reaching a low of $2.6bn in 2021. Activity then recovered in 2022 and 2023 to the above-average values of $6.7bn and $6.6bn, respectively.

    So far in 2024, there have been $1.3bn of hotel and resort project awards, but there is a further $5.2bn in work under bid and set to be awarded this year. The award of those projects would take the tally for 2024 up to $6.5bn – a comparable awards total to those of 2022 and 2023. There is then an additional $15bn-worth of projects in design and due for award in 2024 on the basis of announced and expected delivery timeframes.

    If the value of projects under bid and just a third of the projects under design and also provisionally due for award in 2024 are let as expected, it will be a record year for hotel project awards in the region.

    Saudi investment spree

    Looking at the $54bn-worth of projects split by market, the pipeline is dominated by the touristic megaprojects currently under development in Saudi Arabia, which account for $39.9bn or 74% of the total value of upcoming work.

    The hotel and resort projects in the kingdom are in turn heavily weighted towards several provinces that have been targeted for touristic development. These include Tabuk Province, which has $12.6bn-worth of upcoming hospitality-linked projects as part of the Neom and Red Sea Project developments; the Medina and Mecca provinces, which together hold $16.4bn-worth of upcoming schemes linked to the annual Hajj and Umrah tourism industry; Riyadh, with $7.1bn-worth of upcoming work, including that linked to the Qiddiya masterplan; and smaller values in Asir, the Eastern Province and others.

    In recent months, several hotel schemes have been announced in the kingdom. In late February, Neom announced plans for a Raffles-branded property at its Trojena mountain resort development. The hotel will be located in the Discover cluster of the resort and is slated to open in 2027. The first hotel projects at Trojena are meanwhile well under way, with local contractor Isam Khairi Kabbani Group beginning work in December on the estimated $100m Chedi Trojena, with completion expected in 2026.

    In early March, Red Sea Global (RSG) announced plans for a Four Seasons hotel at its Triple Bay development at Amaala, with Dubai-based U+A Architects, owned by the French engineering firm Egis, as project architect. Four Seasons has also announced other upcoming projects in the kingdom, including a Red Sea project at Shura Island, another at Neom’s Sindalah Island and projects on the Jeddah Corniche and at Diriyah, outside of Riyadh. Saudi Arabia’s Kingdom Holding Company has a 24% stake in Four Seasons, alongside majority shareholder Cascade Investment.

    March also saw work begin on Neom’s Epicon Towers – a technically complex twin-tower hotel – with enabling works being undertaken by the local Ammico Contracting. Previously known as the Gas Station Hotel, the design for the project was developed by Singapore’s Meinhardt Group, with the Hong Kong-based 10 Design serving as the lead consultant on the project.

    These upcoming schemes are set to join $7.8bn-worth of Saudi hotel projects awarded in the past three years, including $1.8bn-worth of awards in Tabuk. In July 2023, RSG awarded a contract at Triple Bay to the local Mas Engineering for the construction of the Marina Lifestyle Hotel & Village. In May, RSG contracted a joint venture of Egypt’s Hassan Allam Holding and the local Rawabi Specialised Contracting to construct the Triple Bay Rosewood Hotel.

    Also in Tabuk, Hilton International opened its first Hampton hotel in March, having jointly developed the project with the Riyadh-based Cayan Group. The project was awarded in January 2022 to local contractor BEC Arabia, with Egypt’s Sabbour Consulting acting as project manager.

    Elsewhere in the kingdom, the Public Investment Fund-backed Dan Company also tendered three hotels to be operated by Hilton at its Palm One project, a farm-based tourism destination in Al Ahsa. The deadline for bid submissions is 30 April. Hong Kong-based LWK Partners is the lead designer for the project.

    Broader regional spending

    In a prominent example of government-led hotel and resort development activity outside of Saudi Arabia, Oman has recently been progressing several new touristic masterplans.

    Oman’s Heritage & Tourism Ministry issued a tender in February inviting consultants to bid to develop a tourism project masterplan for the Remal Al Sharqiyah dunes of North and South Al Sharqiyah. The tender was issued on 27 February, with a bid submission deadline of 17 April.

    Earlier in February, Oman’s Housing & Urban Planning Ministry (MHUP) also revealed the designs for a new $2.4bn development on Jebel Al Akhdar named the Omani Mountain Destination and masterplanned by Canadian engineering firm AtkinsRealis.

    The same month, the MHUP also announced the $1.3bn Al Khuwair Downtown and Waterfront project in Muscat, engaging Zaha Hadid Architects for the project design alongside real estate consultant CBRE.

    In the UAE, much of the hotel and resort development is proceeding in a more piecemeal manner, with a greater number of smaller, more discrete touristic schemes. One major development in November was Dubai developer Al Wasl’s award of the $1.3bn contract to build The Island to China State Construction Engineering Corporation in the largest construction contract in Dubai since 2017.

    The Island is a 10.5-hectare reclaimed island that will feature MGM, Bellagio and Aria branded hotels. The local APCC was the earthworks contractor, with the project being managed by Germany’s Buro Kling Architectural Engineering Consulting and the local Consultant HSS.

    Another recent example of UAE project activity was Modon Properties’ award in November of the contract for a four-star sports hotel on Abu Dhabi’s Al Hudayriyat Island to Trojan General Contracting. The UK’s Atkins is the project consultant, with Canada’s Ellisdon as the project management consultant.

    What is apparent from all of this activity is the clear strengthening of hotel project development as regional governments pursue tourism investments both as a long-term economic diversification strategy and one that dovetails with robust and rising visitor traffic to the region.

    As long as these trends remain, strong ongoing government and private sector investment in hospitality-linked projects can be expected, and with it, the delivery of the region’s $54bn hotel project pipeline by 2030.

    GCC becomes a top tourist destination

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    John Bambridge
  • GCC becomes a top tourist destination

    28 March 2024

     

    This report on hotel investment also includes: Region heads for hotel boom


    The GCC’s pulling power as a tourist destination was reinforced in early March when Dubai-based developer Emaar announced that Dubai Mall was the most visited place on earth in 2023, with 105 million visitors – a jump of over 19% from the 88 million recorded in 2022.

    The developer also revealed that the performance has continued into 2024, with 20 million people visiting the mall during the first two months of this year.

    Dubai Mall’s performance is just one facet of Dubai’s resurgent tourism industry. After a difficult year in 2020, the emirate has bounced back as a tourism destination and is now welcoming more visitors than it did before the Covid-19 pandemic. 

    In 2023, Dubai welcomed more tourists than ever before. There were 17.15 million international overnight visitors, according to data published by the emirate’s Department of Economy & Tourism. The total represents 19.4% growth when compared to the 14.36 million tourist arrivals recorded in 2022. 

    The 2023 total also exceeded the previous record of 16.73 million visitors that was registered in 2019.

    The performance has continued into 2024. Dubai welcomed 1.77 million international tourists in January 2024, an increase of 21% compared to the 1.47 million visitors recorded in the same period of 2023.

    Dubai Mall was the most visited place on earth in 2023, with 105 million visitors

    Saudi tourism growth

    While full-year data for most other GCC markets has yet to be reported, one other GCC country that has recorded strong numbers for 2023 is Saudi Arabia. 

    The kingdom welcomed more than 100 million tourists last year, achieving its 2030 goal seven years early. The 2023 total comprised 77 million domestic and 27 million international visitors, generating revenues of $27bn for the kingdom. 

    Saudi tourism numbers cross 100 million

    Riyadh wants more growth and aims to emulate Dubai by developing ambitious projects that are designed to be global attractions in the future. The target now is to increase tourist numbers to the kingdom to 150 million by the year 2030, with a split of 80 million domestic and 70 million international tourists.

    Saudi Arabia welcomed more than 100 million tourists last year, achieving its 2030 goal seven years early

    Regional travel

    Digging deeper into the data for Dubai reveals an interesting trend. Western Europe ranked first in terms of source markets for international tourists with a share of over 18%, or 327,000 visitors. This was closely followed by the GCC countries with 311,000 visitors, representing nearly 18%.

    Intra-GCC tourism has been identified by policy makers as a key driver for future growth in the region. The logic is simple: the six-country block is home to 60 million people with many wealthy frequent travellers. 

    The importance of GCC travellers is evidenced by statistics from GlobalData, which show that Saudi Arabia was the largest source market for travellers visiting the six GCC states in 2023, with a total of 6.3 million travellers. 

    Oman and Kuwait were also in the top 10, accounting for 2.3 million travellers each. 

    The GCC is also promoting travel within the region by implementing a unified tourist visa for the six countries. The concept was discussed, along with the Gulf Tourism Strategy, at the eighth meeting of GCC tourism ministers in Doha earlier this year.

    The GCC tourist visa is expected to significantly improve the Gulf states’ standing as a tourist destination by making travel within the region easier for visitors from outside. 

    The visa, which is expected to operate in a  similar way to the EU’s Schengen Visa, will allow tourists to visit GCC countries on a single visa. 

    The move to make travel within the region more frictionless should enhance the performance of the GCC’s tourism sector in the future.

     Region heads for hotel boom 

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    Colin Foreman
  • Spanish firm wins $102m Saudi water design deal

    28 March 2024

    Saudi Arabia's National Water Company has awarded Seville-headquartered technology and engineering firm, Ayesa, a €95m ($102m) contract to design 190 sanitation and drinking water distribution projects in Saudi Arabia.

    Ayesa will provide design consultancy services for the projects, which will require a capital expenditure of €5bn.

    The project is part of a broader plan by NWC, the kingdom's main potable water and wastewater collection and treatment entity, to invest a total of roughly €200bn by 2030 "into comprehensive water cycle infrastructure including water treatment and sanitation processes to the delivery of potable water to its population".

    Ayesa will design major hydraulic infrastructure across four regions in Saudi Arabia: south, west, northwest, and north.

    The comprehensive plan includes the construction of multiple water storage tanks to enhance the reliability of the water supply, alongside the development of pumping stations, treatment plants, purification facilities and widespread distribution networks.

    Ayesa will deliver the design of the planned hydraulic projects as well as provide environmental services such as environmental impact assessment and ecological assessments to the NWC during the bidding stage for the construction packages of the planned infrastructure.

    The firm plans to tap "the most innovative technologies in water treatment, sustainable materials, and measures to optimise energy usage".

    Related readGrowth inevitable for the Saudi water sector

    Photo: Pixabay

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    Jennifer Aguinaldo
  • Riyadh maintains Vision 2030 focus

    28 March 2024

    Commentary
    John Bambridge
    Analysis editor

    Riyadh is not allowing anything to distract it from its ambitious goals for economic diversification as part of the country’s Vision 2030 development plan. This includes the war in Gaza and the secondary conflict escalating in the Red Sea, despite its proximity and its direct implications for Saudi Arabia.

    After nearly a decade of a destabilising, demoralising and ultimately fruitless war in Yemen, the court in Riyadh appears to have lost not only its appetite for military adventurism, but also the will to get involved in regional conflict in any way. In this regard, Saudi Arabian foreign policy has drawn much closer to the default position of much of the rest of the Gulf, which is to avoid regional tension and focus on the business angle – and this is partly born of necessity. Riyadh has ambitious plans not just for its own development, but for the volumes of foreign direct investment that it can draw into the country with those plans. Conflicts risk poisoning investor sentiment.

    Saudi Arabia’s reforged foreign policy of relative quiescence, detente with Iran and peace negotiations with the Houthis is working wonders. Non-oil growth is soaring, business sentiment is well-stoked and private equity managers, venture capitalists, consultants and other business hopefuls are swarming its high-profile investment events. And Riyadh is committed. In February it invited companies to prequalify to develop a new airport terminal at Abha, the capital of the Yemen-adjacent Asir Province, as a public-private partnership – a clear sign that it believes the south’s risk-prone days are behind it.

    Riyadh is now so disinclined to lower the music at its own party that it has sat on the sidelines as the US has put together a naval coalition to deter Houthi attacks on shipping – leaving its close ally Bahrain to provide a comparatively inconvenient port of call for Western destroyers. This has remained true even though the two most grievously damaged commercial vessels have both been linked to Saudi trade, with one carrying outbound fertiliser and the other inbound steel and vehicles. The crisis has also contributed to the steep inflation of construction material costs. Still Riyadh remains unmoved.

    The sum of all of this leaves no doubt as to where the full attention of the Saudi state now lies – and that is laser-focused on the delivery of its Vision 2030 and the country’s associated suite of gigaprojects. This is good for the country, and good for investors. If Riyadh is to deliver on its promises, it needs to watch the practical implementation of its plans with a steely and hawk-eyed gaze. With the sums of money involved, any deviation, any waste, could prove catastrophic not just to the budget, but also to the country’s prospects for long-term prosperity. The stakes could not be higher, and foreign affairs are a distraction by comparison.

     


    MEED's April 2024 special report on Saudi Arabia includes:

    > GVT & ECONOMY: Saudi Arabia seeks diversification amid regional tensions
    > BANKING: Saudi lenders gear up for corporate growth
    > UPSTREAM: Aramco spending drawdown to jolt oil projects
    > DOWNSTREAM: Master Gas System spending stimulates Saudi downstream sector

    > POWER: Riyadh to sustain power spending
    > WATER: Growth inevitable for the Saudi water sector
    > CONSTRUCTION: Saudi gigaprojects propel construction sector
    > TRANSPORT: Saudi Arabia’s transport sector offers prospects


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    John Bambridge
  • Region must rethink talent acquisition

    28 March 2024

    Despite multiple policy reversals over the years, the GCC continues to stand out as one of the leading destinations of cross-border migration globally.

    This reflects the long-standing dependence of the regional private sector on imported labour. 

    However, the majority of immigration to the Gulf has always involved relatively unskilled labourers engaged in construction, trade, hospitality and household services. While there has always been a segment of skilled migration, the regulatory treatment of the foreign labour force has not meaningfully differentiated people by profession or educational background. The GCC has stood out due to its sharp regulatory demarcation between domestic and foreign human capital. 

    In a world that is being disrupted by technological change and an advancing demographic transition, the recognition of the strategic importance of attracting and retaining skilled individuals is growing. This is tempered in some cases by populist anti-immigration impulses but, if anything, this political climate tends to reflect popular frustrations with policies that do not effectively differentiate among migrants. Technological innovation can moderate the need for migration, but will not eliminate it.

    Strategic talent attraction is also an increasingly salient issue. The aspirations of creating a diversified, knowledge-based economy underpinned by productivity put a premium on talent attraction in the Gulf region. With appropriate regulations and incentives, the region has an opportunity to move away from its historical labour intensity in many lower-productivity sectors through technology adoption.

    Growing the talent pool 

    While the impact of technology on jobs can be ambiguous, a more productivity-driven economy requires more skills. Moreover, innovative capacity is linked to talent diversity.

    The Gulf countries are exceptionally well positioned for a pivotal position in the emerging global economic order thanks to their connective infrastructure, increasingly competitive regulations and their attractive lifestyle. 

    However, the ability to leverage these advantages hinges on multidimensional competitiveness that has to include human capital. The way forward has to combine more effective solutions for educating and training local talent.

    These realities mean that the Gulf countries will have to navigate their way from the traditional labour laws based on the idea of temporary residency to something more fit for purpose. 

    Efforts to liberalise the traditional labour laws have created opportunities such as self-sponsorship while generally making it far easier for expatriate employees to move between jobs. Such reforms have also made it possible for non-nationals to stay in the region past the age of retirement. 

    The introduction of health insurance reforms and the progressive scaling back of subsidies has meant that the growing non-national residency base no longer imposes fiscal costs, which has sometimes been a source of contention in the past. Increasingly, foreign residents have become a source of significant government revenue.

    More recently, there have been initiatives to introduce new visa categories to attract entrepreneurs and investors. 

    Similarly, more governments now recognise the strategic importance of longer-term residency options that can give expatriates certainty beyond the traditional default option of two-year work visas. These efforts have coincided with initiatives to develop attractive housing options, international private education and steps to improve the quality of life.

    In a world that is being disrupted by technological change and an advancing demographic transition, the recognition of the strategic importance of attracting and retaining skilled individuals is growing 

    Gradual reform

    While these reforms do not yet amount to a holistic immigration policy, they reflect a progressive shift in thinking. Some regional economies now offer a pathway to citizenship for long-term residents, even if the process is seldom formally defined and can involve considerable discretion. 

    All these steps recognise that global competitiveness in the race for talent requires the regulatory flexibility to match the conditions available elsewhere. 

    Steps to reform long-standing policies typically have to be gradual as their success depends on creating a public buy-in. However, the transition to a sustainable approach to talent attraction is growing in urgency. 

    The number of people aged 65 and over is expected to rise from 783 million in 2022 to 1 billion by 2030 and 1.4 billion by 2043. Developing economies are now ageing more quickly than advanced economies historically did.   

    As old age dependency ratios increase, more working-age professionals will find employment opportunities closer to home. This will entail a growing premium on foreign talent at a time when the structural need for it is increasing, not least because the GCC population is no less affected by the demographic transition than the rest of the world. The success of the ongoing economic paradigm shift of the Gulf hinges on devising sustainable policies for competing for talent.

     

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