Wednesday, May 21, 2014

Abu Dhabi Announces More Projects!

The Abu Dhabi Urban Planning Council (UPC) announced that 13 development projects covering over four million sqm were approved during the first quarter of the year, with 70% of this area being residential.

Five of these approved projects were Master Plans, with the remaining eight being detailed Project Plans. A Master Plan is defined as separated multiple buildings, with a road network and community facilities, which must meet certain requirements and standards based on the size of the development. A detailed Project Plan is defined as a single building with no road network, but can include multiple buildings connected by a podium, and requires no community facilities.

One of the biggest project approvals was for Aldar Properties’ Al Raha Beach East Master Plan. Al Raha Beach is a mixed-use development being constructed adjacent to the E10 Highway on Abu Dhabi Mainland, close to Yas Island. The development consists of reclaimed land along the coast with a series of canals and islands interlinked by boulevards creating a unique waterfront community stretching over 20 kilometers.

Al Raha Beach East is the first phase of the overall Al Raha Beach development and will provide over 3,000 apartments, townhouses and villas as well as 50,000 sqm of prime Grade A office space.

Another large Master Plan project approval was for further development of the Petroleum Institute on the Abu Dhabi Mainland, which will continue its focus on educating Emiratis in areas of resource exploration and field development, gas and petrochemical production and processing, and other engineering and geosciences applications. The new enhancements to the campus will include a new male undergraduate center, a new research center and research park, and a Women in Science and Engineering (WISE) program and residential blocks. The Petroleum Institute project will be developed by Abu Dhabi National Oil Company (ADNOC).

Master Plans for UAE National residential projects were approved for Aldar Properties’ Al Shabahat development in Al Ain (for sale to UAE Nationals), and the Bida Al Mutawa development (which will be developed by Musanada as part of the UAE National Housing Program) in Al Gharbia, which collectively will offer over 240 villas, as well as community centers, parks and mosques, to UAE Nationals.

Also approved was the Al Hai Al Tejari project in Al Gharbia, which was announced at the Al Gharbia Development Forum in Abu Dhabi. The project is a mixed-use development at the center of Ghayathi City, located on the main road that connects the major settlements of the Western Region.  It will include a town center, office and retail space, residential apartments and a cinema, and will vastly improve the lifestyle of the existing community in that area.

The remaining eight approvals were for detailed Project Plans, which included Farglory’s EW11 development on Al Maryah Island and Aldar Properties’ Shams Abu Dhabi development on Al Reem Island, both residential projects.

In the education sector, a Project Plan for the new Institute of Applied Technology campus in Al Ain was approved, which will comprise a vocational high school and university for up to 2,400 female Emirati students, and will have a 2 Pearl Rating under the Estidama sustainability program.

A detailed Project Plan for an extension to Khalifa University in Abu Dhabi, which will add an additional 135,000 sqm to the existing 34,500 sqm of the current campus, to serve a total of 3,000 students and 762 faculty and staff when completed, was also approved. The new campus will include Abu Dhabi’s first Medical School, an integrated Engineering College and Research & Development facilities, and will also provide students with world-class facilities such as an auditorium, students center and sports center. The University also intends to enlarge their current Discovery Center to 1,800 sqm to encourage public involvement in science and technology, with the ultimate goal of establishing Abu Dhabi as a knowledge-driven city.

Mohamed Al Khadar, Executive Director of Development Review & Estidama, UPC, said: “These approved projects bring us closer to achieving the goals of Abu Dhabi Vision 2030. The Development Review team is very careful and deliberate in its evaluation of all project proposals; each one must adhere to our regulations and guidelines for planning Complete Sustainable Communities and take into account environmental, societal, cultural and economic factors, thereby ensuring that every new development is in line with the overall vision for the Emirate.”

Since 2007, the UPC’s Development Review Team has delivered 432 projects and master plans covering an area of 50 million sqm. In addition to the above, these developments include Zayed University (Zayed City), Al Maryah Island, the Guggenheim (Saadiyat Island), Abu Dhabi World Trade Center and Yas Waterworld, among many others.

Sunday, May 18, 2014

Kingdom Tower Completed By 2018!

The Kingdom Tower in Saudi Arabia, which will be the world’s tallest tower at 1,008 meters, will be completed in December 2018, said Mounib Hammoud, CEO of Jeddah Economic Company, speaking at MEED’s Arabian World Construction Summit (AWCS) in Dubai.

The contractors working on the SR6bn ($1.6bn) project expect to complete the raft foundation of the tower, which is the largest of its kind in the world, in August this year. “It is the largest concrete raft in the world. In places, the thickness is five meters,” says Hammoud. “Everything in the tower is the biggest or tallest.”

The first phase of Jeddah Kingdom City will be 1.4 million square meters and will include the tower, a mall, a large mosque for 12,000 worshipers, and residential and commercial buildings. France’s BNP Paribas is the financial adviser for the deal and the local Alinma Bank is also assisting with the loan that will bridge the funding gap while the developer waits for revenues from land sales at Jeddah Kingdom City.

The contractor chosen for Kingdom Tower is the local Saudi Binladin Group. In February 2013, a joint venture of the UK-based EC Harris/Mace was awarded for the project management contract to oversee the development of the tower.

The client developing Kingdom Tower and the surrounding Kingdom City is Jeddah Economic Company, which said it is looking to raise about $1bn to help fund the estimated SR13bn ($3.5bn) first phase of Jeddah Kingdom City, together with the SR8.7bn that the shareholders of Jeddah Economic Company have provided to capitalize the company.

Land sales and off-plan property sales are expected to accelerate as construction work on the SR6bn Kingdom Tower’s superstructure starts. “We are not in a hurry to sell land as the value is increasing as the tower construction moves ahead,” said Hammoud.

++ Kingdom Tower is currently one of my favorite Mega Projects and is destined to become a World Icon. This tower will dwarf even the mighty Burj Khalifa in Dubai. The Mega Projects being developed in Saudi Arabia, including Kingdom Tower, King Abdullah Economic City, King Abdullah Financial District and many others, are truly spectacular!

Sunday, May 11, 2014

Mega Projects Could Cost More Than Expected

With more than $2.5 trillion worth of projects in prospect in the years to 2030, the GCC is set to enjoy one of the greatest construction booms the world has ever seen.

But there are risks as well as rich prizes for those bidding for major projects in the region, says Anthony Holmes, director of the UK’s Institute for Infrastructure Studies and an internationally recognized authority on the economic impact of Mega Projects.

“The chances of there being problems with the region’s Mega Project program are enormous,” Holmes says. “Elsewhere in the world, these projects tend to go 40-80 percent over budget. International experience has also shown that big projects don’t get delivered on time.”

“What’s happening in the Middle East region to suggest the outcome will be different?” says Holmes. “There is nothing. It is all being done in the same way. This could mean that the project program in Qatar alone is going to cost at least $80bn more than budgeted.”

MEED(Middle East Economics Digest) estimates that at least 150 projects each worth a minimum of $1bn are due to be completed in the GCC by 2030. Their combined value is estimated at close to $900bn, more than one-third of the value of all projects under way at present or planned in the region.

Details of some of these Mega Projects will be comprehensively discussed at the forthcoming Arabian World Construction Summit(AWCS) on May 12-14, 2014 in the Sofitel Hotel Palm Jumeirah, Dubai. During the conference, local and international experts will also discuss project opportunities and challenges throughout the Arab world, with rising costs as one of the most important factors that could impact on completion and delivery of Mega Projects.

“What is clear is that there’s an enormous concentration of planned project activity in the region,” Holmes says. “You have to think about the material needed to execute all that work. There doesn’t seem to be sufficient work done on quantifying the needs in the years to 2030.”

The rise in costs may be something that Qatar can absorb, but competition for building material, equipment and talent will have an impact on poorer nations in the region.

“If you look at places like Turkey and Egypt, you see that they won’t be able to do the things they want,” says Holmes. “Resources are going to be diverted to Qatar and other GCC markets.”

“GCC countries also don’t have to go to the international capital market,” says Holmes. “But others in the region like Egypt, Oman and Turkey will have to. So even if GCC countries can afford the additional costs, there will be regional implications.”

Holmes, an economist and former investment banker, will moderate the infrastructure Mega Project development Masterclass during the Arabian World Construction Summit. He will also participate in the conference as an expert panelist.

At the AWCS, Holmes will highlight the risks facing all those involved with delivering Mega Projects. But his focus will be identifying actionable solutions.

“What can be done is better co-ordination, particularly in information,” he says. “You can’t make decisions about material resources unless you have information. We need someone to establish a non-partisan body and capture data about future trends in the regional projects market. And there needs to be a regional investment bank that looks only at infrastructure projects.”

Adding to Holmes’ comment on the importance of capturing hard data about future trends, Alistair Kirk, industry expert and Middle East Head of Infrastructure at EC Harris says, “Key pieces of infrastructure stimulate wider economic growth and generate agglomeration benefits – from supporting urbanization and industrial growth to providing stronger trade links. With the major construction boom expected in the region over the next 14 years, relevant industry data and research, pertaining to the infrastructure sector, is fundamental for industry players.”

“Highlighted within the 2014 Global Infrastructure Investment Index (GIII), the UAE and Qatar are highly ranked among the world’s 40 most dynamic countries with greatest potential for growth and investment in infrastructure. The analysis reveals insights into the peculiarities and opportunities in these countries, showcasing areas for long-term growth, financial risks and financial investor prospects.”

EC Harris’ GIII report is expected to launch regionally this quarter to further support the regions’ infrastructure Mega Projects. Regional experts across the sectors from EC Harris will participate and speak at the conference this week.

As the premier construction event in the region, AWCS received overwhelming support from projects’ market stakeholders, such as CPC and HSBC which signed up as the event’s Strategic Event Sponsors; Hyder Consulting and BESIX / Six Construct as Gold Sponsors; Projacs, AGIS and Mashreq as Silver Sponsors; Drake & Scull, Hill International, Zurich and AKSA as Conference Sponsors; Bentley Systems as the CEO Forum Sponsor and Deloitte as Knowledge Partner.

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