Cheap oil sees slowdown of GCC projects

23.04.2015
n the UAE, most of the projects cancelled or placed on hold were linked to the real estate sector, with the gradual softening in property prices likely contributing.

There has been mixed impact of weaker oil prices in the value of projects awarded in the six oil-rich nations of the GCC during the first quarter of the year, a research note said.

The total value of GCC projects awarded in the January-March quarter rose 9.8% to $40 billion. The amount was 5.55 above the average level seen over the last two years.

However, the increase was from a narrow source, with Qatar where Doha Metro and utility projects led the project value by 287% up quarter-on-quarter and Kuwait 72% up quarter-on-quarter.

In the UAE, values dropped 35.6% TO below two-year average, says a research note by Abu Dhabi Commercial Bank on GCC projects.

At the Cityscape Abu Dhabi 2015, which concluded here Thursday, the property developers bucking the trend showed strong confidence in the second biggest economy by unveiling residential as well as commercial realty projects.

The research note expected the GCC projects market to continue growing in 2015, although at a weaker pace than in 2013 and 2014, which were particularly strong years.

In the UAE, most of the projects cancelled or placed on hold were linked to the real estate sector, with the gradual softening in property prices likely contributing, says Dr Monica Malik, who authored the note. However, the research note said, “These cancellations and postponements were largely by smaller property developers, and did not affect the larger mixed-use projects that are part of the UAE’s wider development plans.“

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