Middle East

Property &
Construction
Handbook
2023
Middle East Property & Construction Handbook 2023

Foreword
As the global economy continues to face considerable
headwinds amidst a year of positive market growth, the
risk of a global recession lingers as geopolitics, energy and
economic shocks are sustained. Inversely, the outlook for
the MENA region, specifically the GCC remains strong as
diversification plans continue at a rapid pace and oil prices
remain robust.
While the recovery for the region remains At AECOM, our goal has always been to
positive, considerable caution is required. Stalling develop and adapt our knowledge in line with
growth rates, market shocks from conflict, high the ever-changing trends and construction
and continued inflation, tightening of financial growth opportunities, as well as to provide
conditions, rising debt levels, potential for new agile, innovative and industry-leading solutions
coronavirus outbreaks/variants, all have the to our clients.
potential to stifle projections.
Within our detailed economic round-up, we
This edition of AECOM’s Middle East Property & discuss the global and MENA regions’ current
Construction Handbook assesses trends and new economic and construction performance and
opportunities that have presented themselves present the upcoming challenges and expected
during another year of recovery. The handbook future opportunities.
also reviews the impacts and threats experienced
over the last 12 months on local, regional and
international markets.

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We have carefully selected Furthermore, we explore the This data acts as an indicative
articles, written by AECOM “UN Climate Change Conference high-level guide and comparison
specialists, that focus on COP27/28” by reviewing the of building asset costs and
prevailing themes within the outcomes of the COP27 should be used circumspectly.
property and construction meeting and looking ahead
market. These articles aim to to COP28, which the UAE Like the nature of any project,
provoke thought in relation to will host in 2023. its interpretation is dependent
the growing opportunities within upon several project specific
the Middle East. This includes, Finally, we delve into the recent factors and assumptions.
“City wellbeing”, where we chapter of AECOM’s digital For specific current and
explore how we can enhance transformation journey by benchmarked cost data, please
community wellness through showcasing how our focus on reach out to AECOM’s Program
city and urban masterplanning, innovative and transformative Cost Consulting team to assist
“ESG across the project solutions are being employed you in obtaining relevant and
lifecycle”, where we look at the to improve outcomes for our specific costs for projects.
influence and considerations clients and communities.
We hope that you find our review,
that environmental, social and
As with previous years, we analysis and construction
corporate governance (ESG)
include as a point of reference market evaluations beneficial
has on each stage of a project’s
a synopsis of typical regional and of value in navigating your
lifecycle, and “Sustainable
procurement routes, forms of decision-making in 2023. We
Legacies” provides an overview
contract and building regulation look forward to working together
of our ESG strategy and how
compliance across the Middle to deliver a better world.
we work in partnership with
our clients to leave a positive, East. The reference data section
lasting impact for communities provides averaged international
and our planet. and regional cost data within the
built environment.

As always, we continue to seek your feedback

to support our drive for improvement. Please
contact Marc Gibbons and Jonathan Dowes
via bi_middleeast@aecom.com for further
information.

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Middle East Property & Construction Handbook 2023

Contents
01 Global market review
8 16
Global Global
economic construction
review prospects

02 MENA market review

28 32 42 50
MENA MENA KSA review Tender Price Index
economic construction (TPI)
review market review

03 Delivering a better world

56 60 66 68
City wellbeing: Embedding ESG Sustainable UN Climate
Dubai city as a across the project Legacies Change
gym lifecycle Conference -
COP27

70
Our digital
transformation

Habitas Resort, AlUla, KSA

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04 Reference data
80 86 98
Global building GCC building Weights and
cost comparison cost comparison measures

05 Reference articles
102 106 110
Procurement Middle East Building
routes forms of regulations
contract and compliance

06 Office directory
120
Directory
of our offices

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Middle East Property & Construction Handbook 2023

01
Global market
review
IN BRIEF

08 16
Global Global
economic construction
review prospects

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AECOM

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Middle East Property & Construction Handbook 2023

Global economic review

Following on from the devastating impact of the
coronavirus pandemic, the global economy has continued
to face ongoing challenges that have rippled through
markets and economies across the world during 2022.
These have included higher inflation and interest rates,
in addition to increased commodity prices.
As a result, countries across the world are Stagflation refers to periods where inflation rates
contending with slower growth rates at a time are high or increasing, yet economic growth is slow
when many economies were emerging from a and unemployment rates are high or increasing.
period of weaker growth due to the coronavirus This presents a difficult dilemma for economic
pandemic. Many countries must now contend with policy makers as actions taken to reduce inflation
the impacts of stagflation, which has the potential can lead to unfavourable rises in unemployment
to persist well into the future. and actions taken to reduce unemployment can
worsen inflation.

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 AECOM

According to the World Bank Firstly, by limiting the harm to Advanced economies are
– Global Economic Prospects people affected by the war in forecasted to decline from
Report (2022), global growth was Ukraine. Secondly, counter the 5.1 per cent in 2021 to 2.6
forecasted to slow sharply from spike in oil and food prices by per cent in 2022. Growth for
5.7 per cent in 2021 to 2.9 per increasing the supply of key 2023 is expected to be in the
cent in 2022, which represents a food and energy supplies. The area of 2.2 per cent. Growth
2.8 per cent contraction. Global third area of action is the need for Emerging Markets and
growth in 2023 is forecasted to to act on debt relief. The fourth Developing Economies (EMDE’s)
edge up slightly to a subdued area of focus relates to health are projected to slow from 6.6
level of 3 per cent. preparedness and efforts to per cent in 2021 to 3.4 per
contain the coronavirus. In cent in 2022 and is expected
In a bid to overcome downside conclusion, the World Bank sees to improve to 4.3 per cent
risks, the World Bank outlines the fifth area of effort being the between 2023 and 2024.
that policy makers across the need to focus on the transition
globe will need to concentrate to low-carbon energy supply.
their efforts across five key
areas.

Real GDP Growth

15.0%

10.0%
y-o-y change %

5.0%

0.0%

-5.0%

-10.0%
2018 2019 2020 2021 2022e 2023f 2024f

World trade volume World Advanced Economies EMDEs

Source: World Bank Economic Prospects, 2022

Global inflation
It is noted that up to June 2022, increasing commodity prices Aggregate EMDE inflation
inflation across all segments and the ongoing conflict in increased to circa 9.4 per
of the global economy has Ukraine. Within the World Bank cent, a level also not seen
accelerated, mainly due to – Global Economic Prospects since 2008, whilst inflation in
post-coronavirus demands and Report (2022), global median advanced economies reached
ongoing supply constraints. headline CPI inflation rose to circa 6.9 per cent, a level not
This has been further 7.8 per cent (y/y) in April 2022, seen since 1982.
exacerbated by labour market which represented a level not
constraints, coupled with seen since 2008.

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 Middle East Property & Construction Handbook 2023

Purchasing Managers Index (PMI)

The global composite global goods trade volume with business confidence
Purchasing Managers Index before falling back to 49 declining as a result of ongoing
(PMI) for 2022 remained above points in October 2022. This geopolitical tensions, growing
the 50 point mark until July, was a result of weaknesses in stagflation and financial
when it dropped to 47.7 points, global manufacturing activity instability. Whilst a weakened
the first drop below 50 since and goods trade. demand for goods has eased
post-coronavirus recovery supply chain issues, it is also
witnessed in June 2020. Since Q2 2022 levels represented noted that exports of services
then, it marginally recovered a 28-month low, dating back have been boosted with
to 49.7 points in September to June 2020. This illustrates increased global tourism.
on the back of increases in a contraction of activity

Global Composite PMI

58.5

54.5
70.0
53.0

49.0
47.7
60.0
50.0
PMI Index

26.5

40.0
30.0
20.0
10.0
0.0
Oct18

Jun19

Oct19

Jun20

Oct20

Jun21

Oct21

Jun22

Oct22
Apr19

Apr20

Apr21

Apr22
Dec18

Dec19

Dec20

Dec21
Aug19

Aug20

Aug21

Aug22
Feb19

Feb20

Feb21

Feb22

Global Composite PMI

Source: IHS Markit, JP Morgan

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