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Newsletter 12/2014

Construction/Property Updates | Shape of UAE real estate market

 

This article appeared in Gulf News and was written by Nicholas Baker

It seems like new real estate development projects take place every day in the UAE, from residential oases in the desert to commercial high-rises off the highway. One such player in the real estate scene is Sovis Quantity Surveyors (SQS) which has been operating in the Middle East market for 20 years and is currently working on several projects across Dubai. Here, Vincent Sovis tells Gulf News about the shape of the UAE real estatemarket and how he sees the future developing.

Growth becoming a steady trend in UAE

Over the past year, there has been steady growth in real estate projects, particularly in the property development and hospitality sectors such as hotels and other service-oriented spheres gearing up for theExpo 2020. There is also an expected increase in infrastructure projects and airport expansion work.

Projects constantly moving forward

Projects in Dubai are empowered by the regional strength of the UAE as a premier trading center andbuilding material supplier. The key advantage is that the size and value of the projects enable a greaterleverage of attracting suppliers in the market. Also, there is a greater supply of skilled labor that facilitatesrapid construction and contributes to the success of the industry.

Limitations surrounding supply and project complexities

The potential limitations are the supply and issues surrounding delivery time frames and quality. At SovisQS, we have a team of professionals capable of sourcing the right material at the right price and on time. Ournetwork of suppliers spans across all the key regions like the Middle East, Asia (China, Thailand, India, Philippines), Europe and the US (including Mexico), enabling us to make recommendations to clients that result in firm pricing, prompt delivery times and a reliable source of material/ product and quality. We have dealt with suppliers for over 20 years; therefore, our relationships are well established and ensure that we get priority in our procurement requests because we have a good reputation and the suppliers are confident that transactions will be executed seamlessly. The other limitation is that the projects are getting larger and more complex.

Therefore, even though there is a good supply of labor, it is important to utilize cost-effective methodologies and systems. Labor costs have risen significantly in the past 10 years. To provide clients with cost-effective solutions, it is important to introduce systems and procedures that help improve the efficiency of delivering projects. At SQS, we have adopted the latest policies and procedures of the Royal Institution of Chartered Surveyors (RICS) and invested in the latest technology and training to harness greater value for our clients.

Changing times

The construction industry and the real estate market have evolved quite considerably in the past 20 years.The size and the complexity of projects undertaken over the years have evolved into mega projects requiringsignificant technical skills and coordination. The management of all parties and ensuring smooth interfacingare of utmost importance.

Stabilizing the market in the future

The key difference in Dubai, in its current state, is the level of structure and governance that has beenincorporated into the industry. We have seen greater emphasis on prequalification and the tenderingprocess, and the government has led this initiative with eProcurement. The industry should start to evolve quite rapidly with the introduction of adaptations and innovations. Dubai has continuously challenged the best of firms to improve their level of service or performance. SQS, being a local firm and in Dubai for nearly 20 years, has evolved to incorporate systems and procedures. It has also introduced incentives for staff to focus on developing and improving the way it does business. External consultants are sometimes used to develop the company culture, organization and delivery of services.

Vincent Sovis, Director of Projects, Sovis Quantity Surveyors (Middle East & Australia) and ABCD member

vincentsovis@sovis.co

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