https://arab.news/g43sn
RIYADH: The UAE鈥檚 construction output is projected to reach $130.8 billion by 2029, a 22 percent increase from 2024, as state-led projects drive growth, according to a new analysis.
In its latest report, global consulting firm Knight Frank estimated output at $107.2 billion in 2024, with expansion forecast at about 4 percent annually.
The rise in construction output reflects a broader trend across the Gulf Cooperation Council, where countries are steadily diversifying their economies and reducing reliance on crude revenues.
A July Knight Frank report projected 黑料社区鈥檚 construction output to hit $191 billion by 2029, up 29 percent from 2024, on the back of giga-projects, housing demand, and office development.
Commenting on the latest report, Faisal Durrani, partner, head of research of Knight Frank in the Middle East and North Africa, said: 鈥淭he UAE construction industry is in a period of robust growth and transformation, driven by economic diversification, tourism and strategic infrastructure investments, particularly in housing, transport and smart cities.鈥�
According to the report, construction accounts for 62 percent of the UAE鈥檚 future project pipeline, ahead of transport at 12 percent, power at 7 percent, and water at 5 percent.
Within construction, mixed-use schemes account for 42 percent, followed by residential real estate at 28 percent, data centers at 9 percent, and hospitality projects at 4 percent.
The sector supports key national and emirate-level strategies, including 鈥淲e the UAE 2031,鈥� Dubai鈥檚 D33 agenda, the 2040 Urban Master Plan, and Abu Dhabi鈥檚 Vision 2030.
鈥淎bu Dhabi and Dubai dominate the UAE market, accounting for 85 percent of the total value of contracts awarded between 2020 and August 2025 鈥� $151 billion in Abu Dhabi and $129.9 billion in Dubai,鈥� added Durrani.
In the second quarter of 2025, residential construction costs ranged from 4,200 dirhams ($1,144) per sq. meter for standard villas to 11,000 dirhams for high-end villas, while apartments averaged 4,300 dirhams, according to the Knight Frank report.
The cost of constructing commercial buildings in the first half of this year ranged from 5,500 dirhams to 7,300 dirhams per square meter.
Dubai led momentum, with 75 percent of its contract activity concentrated in construction. Oil and gas projects accounted for only 3 percent of awards, highlighting the emirate鈥檚 economic diversification.
Upcoming developments include Palm Jebel Ali, The Oasis by Emaar, and Marsa Al Arab, as well as Therme Dubai, Naia Island, and DAMAC Lagoons鈥� Venice community, alongside expansions at Dubai Hills Estate. The emirate is also extending its metro system by 15 km with the Blue Line by 2029.
鈥淐ontinuous strategic economic development is reshaping Dubai鈥檚 commercial real estate landscape and the latest construction output figures reflect the strong fundamentals of the market,鈥� said Moataz Mosallam, partner 鈥� Project & Development Services, MENA at Knight Frank.
He said Dubai鈥檚 population is expected to rise from 3.4 million in 2020 to 5.8 million by 2040 under the Urban Masterplan, driving residential growth. He noted that about 8.2 million sq. feet of office space is due by 2028, but demand is likely to outstrip supply, keeping construction activity strong.
In Abu Dhabi, construction made up 23 percent of awarded contracts, trailing oil and gas at 40 percent. The emirate is pursuing major infrastructure projects under its Economic Vision 2030, including a 150-km high-speed rail link to Dubai due by 2030 and a planned 131-km metro system.
Major projects include a 150-km high-speed rail link to Dubai, expected to be operational by 2030, and the planned 131-km Abu Dhabi Metro, aimed at supporting the city鈥檚 growing population.
鈥淪ome 890 residential units were delivered in Abu Dhabi in the first half of 2025, and approximately 33,074 are under construction and scheduled for delivery by 2029. Apartments are expected to comprise 71 percent of this future supply pipeline,鈥� said Mosallam.
Office supply is also set to surge, with nearly 175,000 sq. meters scheduled for 2027, following 51,000 sq. meters in 2025 and 43,000 sq. meters in 2026.