As per data from an industry report by Mordor Intelligence, in 2020, the United Arab Emirates (UAE) construction market’s value was at 101.45 billion USD, and this is expected to rise to 133.53 billion USD by 2026 as it registers a CAGR of approximately 4.5%.
One of the key contributors to the success of the construction market within the UAE is Abu Dhabi. By leveraging trends such as digitalization and the desire to kickstart post-pandemic activity, the construction market in Abu Dhabi has managed significant growth by capitalizing on several intriguing opportunities.
Continuing Development of Riyadh City
Currently, the capital of Abu Dhabi is home to 1.5 million people as per data from 2018. Being that its infrastructure and its people are developing rapidly, the city is also one of the most densely populated all throughout the Middle East. Because of this, the UAE has founded Riyadh City.
Although the initial phase of its development was heavily delayed due to the COVID-19 pandemic, the Abu Dhabi Executive Council recently committed 12.3 billion USD to revive the construction of the major project. As such, it is one of the projects that is expected to heavily drive the post-covid construction market within Abu Dhabi.
Possible Implications of Future Projects
Given that the first phase of the Riyadh City development is forecasted to be completed by early 2023, this project is expected to heavily influence the construction trends within Abu Dhabi especially when considering the magnitude and demand of this venture.
Aside from the basic infrastructure that needs to build (i.e., roads, mosques, medical and educational institutions, etc.), Riyadh City will also need to construct homes for approximately 15,000 residents across an estimated 13,000 villas and 1,800 townhomes as per We Build Value.
Along with Riyadh City, other major projects are also set to foster development within Abu Dhabi’s construction industry. Ranging from shopping centers to airport terminals, Abu Dhabi is slated to have a high construction demand given its activity.
For instance, a construction contract for the Guggenheim Abu Dhabi worth 1 billion USD was recently awarded in September 2021. The museum is set to be completed by 2025, which means that it is likely to affect the growth of the Abu Dhabi construction market for the coming years.
