Total value of cancelled projects in the UAE reached $170 billion, up 13 per cent since July, while the project pipeline rose seven per cent to $175 billion, according to a Citi report.
UAE accounts for 56 percent of the total cancelled and delayed projects for the main regional markets, the MENA construction projects tracker report by Citi showed. The cancellations are an increase of 13 percent since July.
“Unsurprisingly cancellations in the UAE relate predominantly to real estate,” the report said.
UAE’s property boom ended in 2008, with home prices in the Dubai emirate plunging by about 60 percent, forcing many developers to abandon projects.
UAE’s property boom ended in 2008, with home prices in the Dubai emirate plunging by about 60 percent, forcing many developers to abandon projects.
Dubai developer Nakheel , which overstretched itself by building islands in the shape of palms and other ambitious projects, wrote off up to 78.6 billion dirhams ($21.4 billion) of its real estate assets due to a property crisis, according to a bond prospectus.
Meanwhile, projects cancelled and on hold across main MENA markets dropped slightly to $1.69 trillion in August from $1.7 trillion in July.
In other markets, Saudi Arabia added $81 billion of preliminary projects to its pipeline since July, said the report, highlighting the growth potential in the market.
Saudi Arabia, the largest construction market in Mena with $630 billion of projects planned and underway, recorded a project pipeline drop of nine per cent to $200bn.
However, Kuwait saw an increase of 38 per cent to $88bn on the basis of a redefinition of previously cancelled and delayed projects, while Qatar registered an increase of $7bn in its pipeline to $57bn.
The total project pipeline for the Mena market rose three per cent to $648 billion due to an uptick in oil and gas, gas processing and construction (non-real estate) projects.
Projects cancelled and on hold across the main Mena markets stood at $1.69 trillion compared to $1.7trn in July.
Total value of cancelled projects increased by five per cent to $568bn, while delayed projects dropped 2.8 per cent to $1,128bn.
The main sectors contributing to the increase in cancelled projects were construction (9.6 per cent to $251bn), power (5.7 per cent to $58bn) and infrastructure (3.6 per cent to $33bn).
The main declines in delayed projects came from refining (-59 per cent to $23bn), fertilisers (-52 per cent to $500m) and petrochemicals (-14 per cent to $21bn).
The report points out that $5.5bn worth of projects were awarded across Mena, translating to a year-on-year increase of 13.5 per cent.
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