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The pandemic has adversely impacted the construction industry as a whole in the UAE. The commercial construction industry is expected to see low growth in the short term and is expected to improve in the medium and long term. The tourism industry was highly affected due to COVID-19 pandemic due to the travel restrictions. As the restrictions ease down in early 2021, the tourism industry is expected to recover in the coming months. Development of new infrastructure such as resorts and hotels are essential to advance the tourism industry in the UAE and construction being one of the enabler industries will contribute to the development and support of the targeted future growth sectors.
The commercial construction is expected to grow in the country with several upcoming commercial projects. Morpho Hotels & Resorts for instance , announced plans to open five new properties in the UAE in 2021. Despite challenges presented by the pandemic, Morpho Hotels & Resorts Group aims to adhere to strict hygiene and safety to deliver maximum customer satisfaction and build new hotels with enhanced and digitized operations. The Group partnered with Wakira Investments, a food investment company in Dubai which owns popular local restaurants, to expand its footprint.
Moreover, Dubai Investments entered into an agreement with Carrefour, owned and operated by Majid Al Futtaim in the UAE, in December 2020, to establish a new store in Mirdif Hills by April 2021 to serve residents residing at Mirdif Hills. In the same month, Ajman Free Zone (AFZ) announced 73% completion of its ongoing Eco-Friendly Zone project which is expected to be completed by February 2021. The green zone will include new sustainable warehouses and office spaces which could attract local, regional and international investors. The US$9.9M (AED36M) green initiative is part of Ajman’s commitment to transition to a green economy .
The new Dubai Building Code approved in October 2020 includes unified set of standards for construction to encourage sustainability and innovation in building design. The code will improve Dubai’s international investment attractiveness as well as encourage diverse projects in Dubai’s construction industry. The code strives to cut construction costs by streamlining building rules and is established according to highest international standards.
The hospitality industry is expected to recover in Q4’20 and will continue in 2021. In 2021, the hotel stay occupancy in the UAE is expected to recover to 62% on an average. As per Colliers International's MENA Hotel Forecast, demand for hotel stay occupancy will reach upto 62% in 2021. Also, the Expo Dubai in Q4 of 2021 is further expected to boost the hospitality industry and in turn commercial construction industry.
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