Qatar Construction Market-Growth, Trends, and Forecast (2020 - 2025)
NEW YORK, June 9, 2020 /PRNewswire/ -- The Qatari construction market is expected to register a CAGR of 9.6% over the forecast period, 2019-2024.
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- Qatar is expected to be among the fastest-growing global construction markets during the forecasted years, with robust growth forecasts as the government works to meet its significant infrastructure requirements.
- The country's construction industry is expected to benefit from investments made in preparation for the 2022 FIFA World Cup and Qatar National Vision 2030.
- The construction sector will be primarily driven by public investment into the country's transport and commercial construction sectors. The main trends in the construction sector remain to develop Qatar's transport infrastructure, create a modern residential and hospitality environment to support the predicted increase in population and to create a range of world-class sporting venues.
- Despite potential headwinds stemming from the decline in regional political relations, the outlook for Qatar's construction market will remain bright in the forecasted period.
- There are numerous large-scale infrastructure projects underway in preparation of the FIFA 2022 World Cup in Qatar. This includes stadium and other non-residential construction and also entails significant investment in the expansion of the country's road and rail network, as well as other infrastructure capacities that are necessary to ensure the smooth functioning of the World Cup.
- More broadly, the government has also committed to the improvement of greater health and education services and is keen to develop the tourism market, which creates a wide range of opportunities in the construction sector.
- In 2018, the Qatari construction sector witnessed a high growth rate, as the government spent more than 47% of the national budget on major infrastructure projects. Qatar had announced plans to spend USD 5.94 billion on infrastructure and development projects during 2018, including expressways and local road projects besides sewage treatment plants and assets projects.
- Ashghal, Qatar's public works authority, will implement 19 infrastructure projects in 12 areas of the country. In 2018, Ashghal intent to complete expressway projects worth QAR 11.08 billion, infrastructure and local road projects worth QAR 8.88 billion and sewage treatment projects valued at QAR 1.84 billion. In addition, 90% of World Cup-related projects are slated for completion this year.
- In recent times, number of actions and decisions taken by the government, including the opening up the economy to foreign markets and investors and building global partnerships for economic diversification and sustainable development will further strengthen and embolden the investor's confidence in the Qatari economy in general ,and real estate market in particular, during the forecasted period.
Key Market Trends
FIFA World Cup 2022
The Qatar government has planned to spend around USD 103 billion on major infrastructure projects in preparations for the FIFA 2022 World Cup. The construction industry plays a very important role in achieving infrastructure development and thereby attracting foreign direct investments into the country, which is consistent with Qatar's vision of becoming a leading hub in the region for world events, including the FIFA 2022 World Cup.
The official budget for World Cup-specific construction ranges between USD 8 billion and USD 10 billion, although that is supported by the USD 200 billion being spent more generally to have a new metro system and huge infrastructure ready for 2022.
Qatar is spending approximately around USD 500 million a week on capital projects; such as stadiums, training camps, athlete villages and infrastructure projects; such as roads, hospitals and transport hubs, which are necessary to make the country ready for 2022.
The construction sector will witness more cooperation between local and international companies, as certain major projects for the World Cup must require particular expertise and resources.
FIFA World Cup 2022- Host Stadiums
North of the capital in Al Khor City, Al Bayt Stadium began to take shape in late 2016, with the site reporting 40% completion, in terms of structural work by April 2017. The stadium sits at the heart of a 1m-sq-meter site, which also includes a hospital, a mall, and a park. Work on the surrounding area was reported to be 25% complete in April 2017. The giant, tent-like stadium has some unique engineering features. When its retractable roof is shut, special cooling technologies will bring down the temperature inside, making the stadium usable in summer. The 60,000-seat venue has a modular structure so that sections can be removed after the World Cup.
Not all the stadiums are entirely new, with Khalifa International Stadium, which opened in 1976 in Al Rayyan, being given a major facelift for the World Cup. The 40,000-seat arena was the venue for the 2006 Asian Games, among other events, with the Aspire Zone Foundation now redeveloping the facility. The designer is Dar Al Handasah, with MIDMAC and Six Construct as the contractors. The stadium is adjacent to the existing Aspire Academy and the Aspetar facility, a global leader in sports and orthopedic medicine. The upgrade was completed in May 2017.
Qatar National Vision 2030
Under the Qatar National Vision 2030, the country is set to award an estimated USD 85 billion worth of planned projects in the coming years. Out of these proposed projects (but unawarded), about USD 9.1 billion worth of projects are under study, while about USD 31.7 billion worth of projects are at some stage of tendering, and USD 44 billion projects are in the designing stage. About USD 12.1 billion worth of projects are planned or underway in the oil and gas project market. Upstream projects account for the lion's share (about 55%) of the country's oil and gas projects. Qatar's ten biggest construction clients together have about USD 55.1 billion worth of projects in execution with Qatari Diar topping the list with about USD 18.5 billion of projects under construction. Barwa Real Estate Company was Qatar's second-biggest construction client with about USD 10.9 billion worth of projects under construction followed by Msheireb Properties with about USD 5.7 billion worth of projects in execution.
Qatari Diar's biggest project is the USD 17 billion mixed-use Lusail Development. With huge gas reserves and considerable oil wealth, Qatar has enormous potential to generate abundant project opportunities, particularly in the natural gas sector, as it is the top exporter of liquefied natural gas globally.
Upstream and downstream together account for more than 90% of the oil and gas projects market in Qatar, with a combined value of USD 20 billion share by value. The biggest oil and gas projects planned or underway in Qatar are the USD 6.4 billion Bul Hanine Field Redevelopment Project, USD 2 billion North Field Gas Development, and USD 700-million Barzan Gas Development Offshore.
Competitive Landscape
The Qatari construction market is highly competitive, with the presence of major international players. The market presents opportunities for growth during the forecast period, which is expected to further drive market competition. With a few players holding a significant share, the UAE construction market has an observable level of consolidation.
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