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onstruction contractors have started to concentrate on countries once branded as secondary markets in the Middle East construction sector, according to analysis from Frost & Sullivan, a consultancy.

Both Saudi Arabia and Qatar have grown in importance to regional construction companies, as they have looked to diversify their activities in the face of market constraints.

“The industry now appears to be heading in the right direction, having realised the importance of making Saudi Arabia and Qatar the primary markets, while hoping for a recovery of Dubai in another two years,” said Kumar Ramesh, and industry analyst with Frost & Sullivan.

“Saudi Arabia, the most attractive region for construction activities, has already initiated plans of improving its commercial and residential infrastructure. Saudi Arabia has become the focus of the region, attracting a lot of attention from many construction and property developers as the amount of space for development is huge and funding patterns too look promising.”

Figures from Frost & Sullivan suggest the Saudi real estate sector is set to continue its growth trajectory averaging between 5-7% until 2012. At the same time, rentals are expected to increase to the tune of 15-25%, while retail and office space is projected to grow by 20-30% by 2012.

The company offers similar growth projections for Qatar, where it suggests the demand for commercial office space is expected to grow at 15% in 2010. This is likely to be supported by growth in the energy and finance sectors.

“Qatar offers immediate business opportunities as evidenced by ongoing projects in the region,” said Ramesh. “The residential sector has always been a consistent contributor to the construction sector in Qatar and it is not likely to be any different in 2010, with many apartments and villas already gaining approval.

“Overall, the construction sector in Qatar, which is expected to grow by almost 20% in 2009, can easily sustain high growth rates for the next 2-3 years.”


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