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Al Mazaya Holding: Building & Construction Sector survives deceleration, secures significant growth in issuance of new building licences

 

Interdependence between government & private sectors creates competitive scenario & realty investment-conducive environment

The construction sector in the Middle East region has demonstrated an impressive ability to hold for growth and secure quantum leaps on economic performance and competitiveness indices, despite the besetting pressures and declines experienced by the real estate sector at the current stage.

Achievements manifest themselves across all the cities and capitals of the region which are now competing with major cities and global capitals in terms of urban planning, construction and development.

Within this context, official authorities in the region are making significant efforts to streamline issuing of construction approvals and trade licences in line with their plans to attract more investments in unison with the requirements of e-governments, which have proved to be fundamental for ensuring development and competitiveness and attracting more FDI inflows.

The weekly report of Al Mazaya Holding pointed out that the trend towards developing government and private sectors’ performance are facilitating and stimulating the pace of real estate activities and streamlining the procedures needed for obtaining necessary business licences in line with all the plans and strategies being adopted to move forward in achieving further development and addressing the besetting challenges of slowdown and deceleration.

Al Mazaya Holding’s weekly report showed that the region’s markets share common plans for  development and modernisation; they are vying to improve the financial performance of their major sectors, with a clear focus on the real estate sector, upon which a large number of commercial, industrial and service activities is relying.

The UAE’s real estate sector has proved to be capable of dealing with all positive and negative developments, says Al Mazaya report. Industry data show that the effective stimulus incentives launched over the past period positively reflected on the sector. The Emirate of Abu Dhabi saw a rise of 9.5% in the number of construction licences issued in 2018 to 7700, including residential, commercial, industrial, and agricultural and public utilities construction permits.

Development and modernisation best manifest themselves in Dubai, where Dubai Economy has launched an instant licence service to facilitate the issuance of trade licences in 5 minutes, enabling investors to have an ideal environment for doing business. This is in line with the development of competitive tools led by the emirate for years and which increased the number of building permits issued in the emirate to more than 29,000 in 2018, with the construction areas licensed during the same year standing at 10 million square meters.

Al Mazaya Holding added that the growing domestic demand for homes in Saudi Arabia, in addition to the ongoing government enterprises and subsequent plans and projects to stimulate the leisure, tourism and hotel sectors have contributed to accelerating the pace of construction, resulting in the issuance of 30,000 building permits during the first half of this year.

Residential building licences account for a large share of the total licences issued, which reached 63.7% last year. These indicators augur well for the Saudi real estate market under the current stressful conditions as well as reflect the success achieved so far by the Kingdom’s Vision 2030 to provide a stimulating investment environment capable of improving the Kingdom’s position in regional and global competitiveness and investment indices.

The weekly report of Al Mazaya Holding reflected on current positive indicators in Bahrain, where the construction sector is experiencing continual growth with the number of building licences issued during the first quarter of this year reaching 2600, showing a growth of 4.2% compared to the same period last year.

It is noteworthy that for the investment-conducive environment and economic stimulants provided by the Kingdom, Bahrain would not have been able to deal with the besetting challenges and revive the construction landscape.

The development and modernisation of the mechanisms and tools for the issuance of building permits has resulted in facilitating the issuance of trade licences without delay, therefore, strengthening the position of the Kingdom on regional and global competitiveness indices.

In conclusion, Al Mazaya Holding underlined the importance of further stimulating the construction sector in the region and ensuring  the growth of this sector over the coming period, considering the significant interdependence between the government and private sectors in order to ultimately ensure advanced levels of genuine PPPs that will result in a highly competitive and investment-conducive environment.