Turner & Townsend: UAE construction market gaining momentum across key segments
The UAE’s construction sector is facing a rosier outlook in the period ahead, with seven out of ten industry leaders seeing the market heating up and gaining momentum across key segments such as real estate, infrastructure, and tourism. That is according to a new report from Turner & Townsend.
The survey, conducted by the professional services company – which specialises in project management delivery and operates offices worldwide – canvassed the views of contractors, consultants, and developers across the United Arab Emirates (UAE).
The results show that growth in residential projects – both private sector and social housing – has been the strongest driver of activity over the past six months, followed by mixed-use developments and commercial projects such as office buildings.
“Residential construction is thriving across the region due to urban expansion and population growth,” stated Turner & Townsend in its report. This growth in building activity is coupled with a strong focus on digital transformation, sustainability, and urban innovation.
According to one respondent, “The housing market’s performance over the next 12 months will have a major impact on the construction industry. Overall, there is still a net migration of people and capital to the UAE, so I expect growth to continue.”
The UAE’s commercial market, meanwhile, is experiencing robust demand due to the limited availability of high-specification office space that integrates technology and sustainability features now expected by occupiers. This demand is driving the development of high-quality commercial spaces, with Abu Dhabi aiming to have 11.6 million square metres of office space available by 2030.
Tourism-related projects – such as hotels and hospitality facilities – and data centres (to support booming AI demand) are also in high demand.
The UAE Tourism Strategy 2031 is a major growth driver, targeting 40 million visitors by 2031 through new investments worth AED 100 billion. “There is a vast pipeline of tourism and hospitality construction projects, further highlighting the strength of the emirates’ tourism infrastructure,” noted the researchers.
When it comes to data centres, the growth opportunity is not new – a previous report from Turner & Townsend forecasted that the data centre market in the UAE and wider Middle East will accelerate further in the years ahead, with the sector expected to triple over the next five years. Respondents in the latest report said they see “a vast pipeline of projects supported by substantial funding from government authorities.”
The growth of transport infrastructure projects is another notable driver, with the sector expected to reach a CAGR of 5.6% by 2030. Flagship projects include Abu Dhabi’s AI-driven Urban Loop, the AED 22 billion hyperloop between Abu Dhabi and Dubai, and the AED 20 billion Gold Line metro. Investments in sustainable and improved transport infrastructure are key to meeting the UAE’s growth ambitions and national visions.
With these and other drivers, the UAE’s construction market is expected to grow from its current size of $43 billion to $52 billion by 2033.
Sustainability
The survey results further highlight the growing role that sustainability plays in the design and delivery of construction projects. While 46% of respondents reported a commitment to net zero on current projects, 56% indicated an increase in sustainable measures more broadly.
“This trend is expected to accelerate as new government strategies, legislation, and investments are implemented, with the UAE Energy Strategy 2050 driving expansion in the utilities and energy sectors,” said Adam Ralph, UAE Country Manager at Turner & Townsend.
Illustrating the vast potential to make projects greener, a previous report from Boston Consulting Group suggested that developers of mega-projects in the Middle East could cut substantial greenhouse gas (GHG) emissions at “zero to low cost” by embedding decarbonisation policies during the design stage. The benefits could amount to as much as a 50% reduction in total emissions across the project lifecycle.
Commenting on the Turner & Townsend report, Ralph said: “Our survey shows a market that’s not only growing but evolving. Clients and contractors alike are responding to the UAE’s ambitious development agenda with innovation, resilience, and a clear appetite for sustainable progress.”
“With strong activity across residential, infrastructure, and hospitality sectors – and increasing interest in digital and sustainable delivery – the region continues to offer significant opportunities for organisations looking to contribute to its long-term transformation.”
