The construction industry in Dubai is looking up again and will rebound sometime in future – although it is unlikely to attain the giddy heights of the past. That's the opinion of Al Habtoor-Specon managing director Thrasos Thrasyvoulou, who was speaking to MEP last week.
Due to a conscious strategy right from its inception to diversify the company’s basket of projects, it is now in the enviable position where it is still growing, thanks to major projects as far afield as Abu Dhabi and Qatar.
“A year after we were established in 2006, I said we would focus on Qatar. This has finally happened, from the beginning of this year, though I wanted to go in earlier. The philosophy of our group is to enter markets quickly, but also to do so steadily and safely,” said Thrasyvoulou. “Thus regional expansion was part of our strategy right from the very beginning.”
“The crisis in the UAE has affected us like everyone else. A lot of developers were affected, and the whole market has been turned upside down. Demand has fallen off dramatically, banks cannot get payment for loans, and the income streams are no longer there. The number of sizeable and prestigious projects the group was negotiating for has gone down dramatically.
“Al Habtoor-Specon LLC has had a few projects stopped or shelved, but as a whole it has not been that much of a disaster on the MEP side, as only about 20% of our projects were in Dubai. Our business plan was to boost our growth in Dubai, but now the emphasis is on areas like Abu Dhabi and Qatar,” added Thrasyvoulou.
“Apart from the project pipeline being curtailed and developers being skeptical to take on new projects, another big issue is payment. Developers are in a situation where they do not have the funds to finish projects, or begin those projects they still have lined up. However, the banks seem to be on a better footing six months down the line, and the liquidity crisis is easing.
Thrasyvoulou belives that with assistance from the government, and with some clarity about the global economic situation, project finance is beginning to trickle through again.
"This isn't the case in Dubai though – Dubai will take some more time to get back on track. This is my personal opinion,” the executive observed.
“I believe the ambition of the government is to re-establish Dubai on an upward trend, and it will no doubt achieve this. I personally believe that the sort of boom we had two to three years ago will not be reached again. But there will be enough work for contractors like us with the necessary background and experience to participate in the projects to come,” concluded Thrasyvoulou.