{"id":20943,"date":"2016-07-26T17:50:10","date_gmt":"2016-07-26T10:50:10","guid":{"rendered":"http:\/\/www.siamlandbank.com\/propertynews\/?p=20943"},"modified":"2016-07-26T16:02:07","modified_gmt":"2016-07-26T09:02:07","slug":"gulf-property-markets-face-perfect-storm-due-to-overbuilding-report-says","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/gulf-property-markets-face-perfect-storm-due-to-overbuilding-report-says\/","title":{"rendered":"Gulf property markets face 'perfect storm' due to overbuilding, report says"},"content":{"rendered":"


\nProperty markets across the Arabian Gulf are facing a “perfect storm” as a result of overbuilding by its developers, and continued softening demand as market sentiment shifts on the back of lower oil prices, according to AT Kearney.The management consultancy firm has published a new report which states that the value of projects currently in the construction phase is four times higher than the value of all developments completed within the past decade. And the value of projects at an earlier stage of development equates to about 10 years’ worth of work.”Each year between 2016 and 2020, this pipeline would deliver anywhere between seven and 12 times the real estate value delivered yearly between 2007 and 2009,” the report said. By December 2015, the GCC had US$2 trillion worth of property projects in the pipeline, and property accounts for 70 per cent of the construction sector’s workload for this year and next.However, AT Kearney added that delivery is patchy. Since 2006, the value of regional projects that have been cancelled is twice as high as those that have completed. This wave of new projects looks set to be delivered in a weaker market, AT Kearney’s report said, with average GDP growth set to slow to about 3.2 per cent between now and 2020 \u2014 considerably below the 8 per cent per year that was being achieved in the run-up to 2008. And although population growth remains robust, the 2.9 per cent increase that the Economist Intelligence Unit is forecasting over the next five years is just one-third of the level experienced before the 2008 crisis. Liquidity conditions are also tighter, with growth in banking loans set to slow by a third over the next three years, according to Fitch Ratings.AT Kearney’s report argued that developers have little choice but to transform working methods if they are to successfully deliver new schemes. “There is little evidence the real estate industry is preparing for the next market cycle. Developers need to probe for disruptive innovation beyond the traditional boundaries of their industry and beyond their known value chain,” said Federico Mariscotti, a vice president at AT Kearney. It suggested a range of changes to working methods, including the use of construction techniques developed in space by sintering sand – the process of compacting and forming a solid mass of material by heat and\/or pressure without melting it to the point of liquefaction – as well as calling for better collaboration between developers, architects and contractors. It suggests a different approach to tendering, by offering a package of, say, three major projects to be delivered over several years to allow the different parties \u2014 including the facilities manager responsible for running the buildings \u2014 to create “value networks” with shared ideas and goals.Douglas Pickles, a director at AT Kearney, said the industy’s current supply chain was “inherently inefficient”.”This commonly-accepted model leads to design changes on up to 40 per cent of project specs and delays of six months or longer,” he said. “The future belongs to those developers who can tackle these inefficiencies by introducing innovation and increase upfront collaboration within their supply chain.”mfahy@thenational.aeFollow The National’s Business section on Twitter
\n
\nSource : thenational.ae
\nRead more…Gulf property markets face ‘perfect storm’ due to overbuilding, report says<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Property markets across the Arabian Gulf are facing a “perfect storm” as a result of...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[],"class_list":["post-20943","post","type-post","status-publish","format-standard","hentry","category-property-news"],"jetpack_featured_media_url":"","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-5rN","jetpack-related-posts":[{"id":22155,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/drones-and-data-point-the-way-forward-for-better-returns-in-uae-construction\/","url_meta":{"origin":20943,"position":0},"title":"Drones and data point the way forward for better returns in UAE construction","date":"August 7, 2016","format":false,"excerpt":"\r A couple of the giants of the management consulting industry produced weighty documents over the past few weeks that made for slightly depressing reading for the region's construction industry. The one that grabbed attention locally, for understandable reasons, was from AT Kearney. It predicted \"a perfect storm\" for the\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":18680,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/after-a-boom-decade-shanghai-still-needs-room-to-grow\/","url_meta":{"origin":20943,"position":1},"title":"After a boom decade, Shanghai still needs room to grow","date":"July 5, 2016","format":false,"excerpt":"\r A decade ago, there were construction cranes everywhere in downtown Shanghai, and many market analysts were sounding alarms about overbuilding and predicted a downturn in the city\u2019s office property market.\r \r Source : South China Morning Post\r Read more...After a boom decade, Shanghai still needs room to grow","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":87969,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/aviation-projects-worth-nearly-50bn-underway-in-the-gulf\/","url_meta":{"origin":20943,"position":2},"title":"Aviation projects worth nearly $50bn underway in the Gulf","date":"May 10, 2018","format":false,"excerpt":"\r New research says $12bn greenfield New Kuwait Airport is the largest under construction\r \r Source : arabianbusiness.com\r Read more...Aviation projects worth nearly bn underway in the Gulf","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":27175,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/call-for-more-clarity-in-mena-public-private-partnership-projects\/","url_meta":{"origin":20943,"position":3},"title":"Call for more clarity in Mena public-private partnership projects","date":"September 26, 2016","format":false,"excerpt":"\r Almost a quarter of the public-private partnership (PPP) projects launched in the region over the past 20 years has been subsequently abandoned, according to Meed.Its new study on the PPP market states that 23 per cent of the 80 PPP projects that have been brought to market in the\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":24437,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/dubai-property-market-in-the-minds-of-gulfs-high-net-worth-investors\/","url_meta":{"origin":20943,"position":4},"title":"Dubai property market 'in the minds' of Gulf's high net worth investors","date":"August 30, 2016","format":false,"excerpt":"\r High net worth investors from the Gulf are most likely to invest their money in Dubai next year, as opposed to London or other international markets, according to Cluttons.Speaking at the launch of the third part of its Middle East Private Capital survey, the firm's head of research, Faisal\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4299,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/habtoor-leighton-group-stays-quiet-on-prospects-for-initial-public-offering\/","url_meta":{"origin":20943,"position":5},"title":"Habtoor Leighton Group stays quiet on prospects for initial public offering","date":"February 10, 2016","format":false,"excerpt":"\r \r The UAE-based contractor Habtoor Leighton Group (HLG) owes its Australian parent A$1.2 billion (Dh3.13bn) even as it received an equity injection of A$33.5 million from shareholders last year.HLG was meant to be \"IPO-ready by 2016\", according to previous statements made by its partners. 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