Middle East Construction & Real Estate Podcast
The Middle East is one of the world's most discussed and revered construction and real estate marketplaces. This podcast features some of the industry's foremost individuals and will cover a range of topics, projects, initiatives, and trends affecting the industry.
Hosted by Jonathan Eveleigh
With 23 years experience working in the Middle East for leading contractors Laing O'Rourke and Khansaheb, as host of the MECRE podcast I will be joined by experts from leading organisations in the property and construction industry to share their knowledge, views and advice on a range of key subjects, projects, new developments, market trends and other topics
Middle East Construction & Real Estate Podcast
Forecasting the next few years of the Middle East's property and construction sectors with Colin Foreman
Unlock some of the secrets behind the thriving Real Estate and Construction industry as we sit down in discussion with Colin Foreman, the keen journalistic mind behind MEED’s editorial intelligence, for an eye-opening finale to our first series. Get ready to understand the record-smashing GCC projects market where a staggering $178 billion in contract awards has set a new benchmark. We dissect the monumental contributions of Saudi Arabia's giga-projects and Dubai's thriving real estate landscape, offering a panoramic view into the regional powerhouses and the evolving trends that will shape the Middle East’s skyline through 2024 and beyond.
The breathtaking pace of construction in Saudi Arabia comes with its own set of hurdles as well as ‘golden tickets’. We scrutinize the shifts in the contractor terrain, the impact of supply chain challenges, and the banking sector's caution with project financing. With the likes of Arabtec and other major contractors fading into the annals of history, we probe the strategic manoeuvres of the remaining contractors and consultants, who seek to master the balancing act of growth risk with reward.
As Colin helps us to cast our eyes to the future, the ambition of Saudi Arabia's projects, such as NEOM, The Red Sea Project, Diryah Gate, heralds an era of virtual endless potential, somewhat reminiscent of Dubai's boom periods.
Colin offers his expertise on the intricate challenges in nurturing talent in remote yet burgeoning hubs, the dynamic nature of GCC post-Al Ula accord, and the profound influence of regional development on sectors like transport and utilities.
Join us for a profound exploration into the forces driving the Middle East’s construction and real estate narrative as we look ahead to the unfolding story of 2024 and beyond.
Welcome everyone to this, the final episode of the first series of the Middle East construction and real estate podcast. Thank you for joining us once again. As you will know by now, I am your host, Jonathan Eveleigh, and as this is the last episode of this series, I am absolutely delighted to be joined by a very good friend, Colin Foreman, editor at Meed. Colin has been a Dubai-based journalist since 2005 and is a real specialist in all things construction and property across the Middle East region and, as such, he has a huge wealth of experience and intelligence about the industry, most of which gets reported via the various Meed products and services, but not all of what he thinks or knows about. We spoke to Colin just before the end of 2023 about his thoughts for 2024 and some of the trends and prospects he foresees for the industry over the coming few years. So let's get started and hear what Colin has to say. Colin Foreman, a very warm welcome and thanks for joining me on this episode of the Middle East construction and real estate podcast. How are you? Very well.
Colin Foreman :Jonathan, good to speak to you.
Jonathan:Good, nice to speak to you too. Thanks for joining, colin. Maybe we can kick things off by getting you to do just a quick introduction to what Meade is and, in terms of this podcast and our audience, I wonder if we should just also talk briefly about Meade projects and then a bit about yourself and your role at Meade. Is that okay to kick things off? Yeah?
Colin Foreman :sure, Meed is a publication. We've been around since 1957. It's remit, and at the very beginning, was to promote or inform readers about business opportunities in the Middle East. And although the way we do work, and certainly how that work is transmitted, has changed massively over the years, it went from being a sort of a 10x type product to being a print magazine, which then became a website, which we have now a website at the print magazine, and then we've also added to that other sort of services, one of which is a data service Meade projects which tracks projects across the region and into other regions as well, which basically gives subscribers information about the status of projects, how large they are, who's working on them, which provides companies with business intelligence for working on projects in the Middle East. So in some ways everything's changed, but it's still the same thing as we were doing when we were first formed.
Colin Foreman :As for myself, I started with Meade in 2005, reporting on construction. I was very fortunate to be reporting on Dubai construction in what really was very, very exciting times and from that I've stayed working with Meade and I now editor overseeing work on all sectors. But I must admit I still find construction very interesting and I enjoy talking about it, so it's good to be here today.
Jonathan:Good, well, that's great. Thanks for that introduction, and I think for me, the sort of context and the importance of what you've just said relative to this discussion is that the information and data that you'll be sharing with the listeners and providing is based on a great deal of sort of hard research and intelligence gathering, as opposed to just being a bit more anecdotal there. I say so I think that's useful context actually that you've just given us, and what we'll do is we'll put the any links that you want us to for Meadecom and Meade projects in the in the episode notes. So, thanks, thanks for that, colin. That's a great introduction. What I'd like to do to start, if you don't mind, is, without perhaps getting into too much specific detail at this stage, can you just give a high level overview of the current state of the construction and really state market in the Middle East, maybe highlighting any sort of trends that may be going on or hotspots that may be worth mentioning?
Colin Foreman :Yeah, I mean in terms of hotspots, it's very much Saudi Arabia there's an awful lot of project activity there which is being driven by the sort of giga project program that they have there. There's five official giga projects but there's probably a lot of other sort of unofficial giga projects. There's also quite a lot of activity in the UAE in terms of construction as well. We've seen a rebound in sort of to buy properties fortunes over the last two, three years and then on top of that you've got quite a lot of infrastructure development in Abu Dhabi and not specifically construction. But there's still an awful lot of work going on in oil and gas, which we tend not to categorize as construction, but it's still a lot of work for construction companies, sort of doing civil works and things like that. So really it's across the board at the moment, which is a little bit unusual.
Jonathan:Yeah, but prominently KSA and UAE At this point. Perhaps leave the KSA discussion there for now, because I want to come back to that a little bit later, if you don't mind. What I do want to do is just pick up some of what you've just said, actually, but you've reported fairly recently in me that the GCC projects market this year had passed the previous record for the highest value of contracts that have been awarded in a single calendar year. So for this this year so far, I think it's $178 billion of contracts having been awarded, and the previous in 2014 was 173. So already we're not quite at the end of the year yet, but we're already five billion dollars, which is a huge sum of money over what it was previously from 2014, which we know is a boom year anyway. Can you just sort of drill down a little bit into those statistics and just expand on them a little bit in terms of the countries and the sectors driving those numbers?
Colin Foreman :Yeah, I mean, really the very sort of top line summary is that pretty much everything's performed quite well over the years, so that's why you've got that record coming through. What you've had in the past is sometimes you'll have a lot of spending in construction but not so much in oil and gas, or vice versa, and you might have a UAE market that's very hot, whereas the Saudi market's a little depressed, whereas this time around all the main drivers have performed strongly in the same year. So that's why you've got the record coming through. As I said, Saudi Arabia is a pig market, but I know a lot of your listeners will be focused on what I sort of call sort of building work and infrastructure. The way we categorize that is construction and transport. So, just to give people a feel, we'll start with Dubai, because I'm sitting in Dubai but 2023 for construction and transport.
Colin Foreman :There was 20 billion of awards. But to give that some context, it's a strong year but not a record. I mean it's not as high as, say, 2017, when there was 25 billion of awards. Wow, and that's it's a lot lower than the 33 billion that was awarded in 2007. And the other thing you've got to remember with 2007, that was a value of contracts that you know. Obviously, we've had cost escalation and inflation since then. So, yeah, Dubai is busy at the moment with real estate, but it's not anything like what it was in the sort of 2007, 2008 days. So that's the Dubai segment of the numbers. Abu Dhabi 8.6 billion, which is not as high as it was in 2019 when there was about 10 billion and their peak, if you remember, was in around sort of 2008, 2009 and through into 2010. There was quite a lot of work coming through from the likes of Aldar and Mabadla in those days.
Colin Foreman :So I do remember it very well.
Jonathan:Yes, the Abu.
Colin Foreman :Dhabi market the busy but not at historic highs. And then for Saudi, it's a growing market and it's a 39 billion this year. So you know, in terms of construction transport, it's double the Dubai market and, you know, four times the Abu Dhabi. If you combine Dubai and Abu Dhabi it's still sort of $10 billion bigger than that, but obviously a bigger country. That's almost at historic peaks.
Colin Foreman :There's a little bit of an anomaly in the Saudi number and the fact that the peak in Saudi was in 2013. It's a little bit unfair, but if you discount Riyadh Metro, which was awarded that year, that number comes down to about 23 billion, because they awarded $23 billion worth of contracts in one day for Riyadh Metro. So that peak in 2013 is a little bit of a strange one. If things go as planned for 2014, which will probably come on to later, I think the Saudi market will beat that 2013 number. So they're the construction and transport numbers. So it's a good year for construction and transport, but for those of you that have been in the region for quite a number of years, it's still not an, you know, absolute boom time.
Jonathan:No, no, and as you say, predominantly and we will cover this a little bit in a later question predominantly being driven by Saudi. And I guess if we were here in 12 months time doing the same thing, those figures might look even more sort of significantly swayed towards KSA, if they do continue to keep awarding those large I think it's important to say that there's quite a lot planned in the UAE, I mean certainly the Dubai market.
Colin Foreman :there's still quite a lot of real estate projects coming through. There's the blue line, dubai Metro, you know. Interestingly, dubai's not really done that sort of Dubai Inc, if you want to call it, has not done that many projects itself Over the last few years. Some of their developers have, but they've been all things that they've developed off plan or, crucially, sold and financed with off plan.
Colin Foreman :Yes, yes, they've not done things that they financed themselves. The Metro is going to change that Sure, and also there's a few sort of hotel assets and things that they're going to look to move into construction as well, which they're going to have to pay for themselves. So I think the Dubai market will pick up and look a bit different over the next 12 months.
Jonathan:What are the other things? I wanted to just sort of run past. You really was, and I know it's difficult sometimes to be 100% clear and definitive around. What is a public client versus a private client? But is it possible for you to say whether it is predominantly maybe just touch on things like the next phase of the Metro in Dubai but is it possible to say whether it's predominantly government led stuff or the private sector stuff that's driving that activity? Or, again, is it a mix?
Colin Foreman :Yeah, I mean to use a sort of 2008-2009 term. If we sort of include what was then called a government-related entity, I think you'll find that most of the work either is government or government-related entity, with private sector picking up some of it. Certainly, the bigger ticket contracts are predominantly government or government-related entity. And I mean you then go into the realms of oil and gas for some of the really big ones and they're obviously national oil companies, state controlled. So I would say, definitely leaning on the side of public. If you include those sort of SPV development vehicles that are owned by a sovereign wealth fund, that a sort of government-related entity. So I would say public Okay.
Jonathan:And again, sort of keeping in mind that level of activity that you've highlighted, is it bringing any challenges or pressures to the construction market or real estate market? I'm thinking of things like availability of suitable contractors both main and MEP, by the way to deliver the larger projects. Is there a shortage of them? Is there a shortage of sort of labor and skilled workforces or indeed a shortage across the wider supply chain for things like key materials?
Colin Foreman :Yeah. I think the easy way to answer that is yeah, all of the above. I think the supply chain in the UAE is a bit more elastic than it is in Saudi Arabia, for two reasons. One, it's a bit more international People come into the UAE market a bit more easily than they do in the Saudi market and also there's not the level of activity that there is in Saudi Arabia at the moment, and it's also not there hasn't been a step change in the level of activity as well.
Colin Foreman :Saudi Arabia is coming off quite a few quiet years. Just to digress slightly, I think that one of the key problems is that between 2014 and 2020, if you want to take a date you had most of the big contractors in the region that cease operations in some way or another. So if we think about the UAE, if we'd have gone to the UAE in 2009, we'd have said the two biggest contractors in Dubai and Abu Dhabi would have been Al-Habt, or Engineering, or Al-Habt, or Layton and Arab Tech Construction, and you'd have also said Al-Jabba Construction in Abu Dhabi. All three of them are not really operating the same way they were or, in the case of Airtek, they've gone bankrupt.
Colin Foreman :A similar story in Saudi Arabia, you've got Saudi bin Laden, which is a shadow of its former self, and Saudi OJ has gone out of business. So I mean, there's been an awful lot of I suppose you could call it supply chain destruction that's gone over the past 10 years. And then you've got a market that's ramping up. So, yeah, that's a real problem for the supply chain at the main contractor level. But then, of course, you've had subcontractors that are exposed to some of those big contractors that have gone out of business, which has left all sorts of problems there. And then there's the age old supply chain issue. You know, is there enough cement?
Colin Foreman :Is there, what's happening with steel prices and then some of the other issues that have been, which we seem to be coming out of a little bit. Some of the sort of logistics issues that we've had, sort of post COVID, have been a problem. I think the manpower, I think, is not too much of a concern. I think sort of South Asia is traditionally where labor comes from. That seems to still be the case and in terms of finding people, I think I think you can still find people and that does seem to be a bit more enthusiasm from, say, the UK and places where the economies aren't looking the outlook's not looking as good as it did more recently. I think the other thing which is really important to talk about is finance.
Colin Foreman :I think finances is going to be a bottleneck as well and there's several ways to look at that. There's the sort of financing of the projects for the developers, but perhaps more interesting is sort of financing for contractors. We've had a really bad situation over the last 10 years where bonds have been pulled all sorts of places on different jobs and I think banks are just very reluctant to fund a contractor. So a developer might think that they can attract a contractor to the market and the contractor can take on some work. But getting a bond from a bank is not going to be that easy. Getting any sort of financial support from a bank who is still smarting from some of the financial issues, say from the fallout of Airtek it's going to be a lot more difficult than it had been, say, if we were talking, say, in 2007, 2008 in Dubai, when you really were in that sort of credit boom period.
Jonathan:Yeah, it's an interesting point you've made about financing as well, because you know, in principle it is putting contractors into a much stronger position in terms of how they go about their strike war consultants as well, actually, not just contractors how they go about their strategy for finding new business and I guess you know where I'm going with this is it should be driving a level of selectivity for those contractors and consultants such that they don't hopefully get themselves into too much trouble in the future with bad debt or whatever it may be.
Jonathan:So you know that may be a strategy that they're taking, as opposed to anything else in terms of just growing and growing and growing. You know, as I say, keeping an eye on selectivity of the right projects and making sure they can deliver them, because you know, at the end of the day, that's what contractors have to be sure that they do is deliver successfully and hopefully get paid for doing that work. So it should be, it should be a good time for contractors to to apply that element of selectivity, I would have thought, rather than just being dragged into just, you know, doing more and more work and not not being able to deliver on it.
Colin Foreman :I mean there's a real shortage. There's a real shortage of main contractors at the moment If you just look at the supply and the demand. As I said, there's been those sort of big hitters of no longer operating the way they used to. At the same time, you've had a lot of internationals leave the market.
Colin Foreman :Yes which has been a major problem and that's been talked about quite a lot, I think. The other thing which I think is really important to stress is that a lot of the old families that had quite sizable construction businesses have kind of changed the makeup of their group a little bit. They've sort of got out of some of the more traditional industries and the construction, the construction companies of the sort of the local families aren't really the powerhouse that they were maybe 10 years ago. So you're having that sort of main contractor market change in quite a number of different ways actually.
Jonathan:Yeah, that's again a good point. I want to come on to a little bit in terms of competition and new entrance coming into the market in a while. Just before we do that, I think all of what we've been talking about in terms of increased levels of activity. Obviously I like to have a cost impact, so I've got sort of a two-part question, I suppose, if we start looking at project costs, is there, do you think there is already or there's a risk of price increases in key materials or other costs which is having an effect or will have an effect on construction projects even to the point that you know potentially risks their viability? And the second part of the question is we've known that contractors have traditionally operated on pretty low margins really, particularly considering the risk that they take on on some of these projects. Are contractors, or indeed consultants, seeing an opportunity to increase their pricing levels, their profits, their preliminaries, their fee levels, et cetera? So two-part question around you know the whole increase in costs.
Colin Foreman :Yeah, I mean, I think, without cost of going up. So that's easy to answer Whether it's affecting the viability of projects. My sense is at the moment no. But I think there are some clients starting to get some unpleasant surprises when tenders are returned. But I think we're at the stage of development where some of those problems aren't really coming home to roost yet. So I think they're taking that one on the chin at the moment. But I think that will change In terms of low margins from my experience and you're a contractor, jonathan, so maybe you will know this but contractors tend not to tell you if they made a good margin.
Colin Foreman :They'll tell you if the job's not going so well and they're doing it at cost, but they tend not to confess that. Yes, we made a lot of money on that job. But I think I remember someone saying that clients always want me to tell them that I made lots of money apart from the job that I'm about to do for them. It's very difficult to know what people's margins are, but sort of deciphering all the chat. I think it's still quite competitive, but I think that is starting to change and I know we want to talk about this a little later on. I think some of the procurement methods that are coming through will mean that for some jobs I think the margins will start to see some improvement.
Jonathan:Okay that's interesting. I do want to talk about competition. I think you've made a very valid point that some pricing levels are driven by levels of competition. I did see and I'm just using this as an example here I did see that China's state had been awarded the huge and I can't remember the value of it you'll probably be able to tell me of the island project, the Wassau project, on Jamira Beach Road. Is there still an influx of? I know China's state had been in the region for quite some time, but is there still new entrance, if you like, chinese or other nationalities coming into the market? And if there are, what effect is that? I mean, we've touched on it already. I mean, what effect is that likely to have on pricing levels? Is it going to keep it very keen and competitive, or indeed anything else, for any other sort of impact on the existing contractors operating in the region?
Colin Foreman :Yeah, I mean I think that Wassau project's quite an interesting one. I think if that job had been tended, say for argument's sake, in 2006, that have had a list of eight international contractors, I could probably list off who the A would be if I thought about it, but they'd be the bigger names that were operating in the market. Then, you know, first, forward to 2022, 2023, and they put the job out to tender and they got a lukewarm response and really just two or three people participating and I suspect not all three of them were taking it all that seriously. So, yeah, there has been a big change in the attractiveness of working here in terms of companies that still have appetite for it. China State I don't think we can really consider them as a new entrant anymore.
Colin Foreman :I mean, if people remember that, I think their first job was on the villas on the palm and then they sort of diversified out to do a few other villa jobs for Dubai holding and then picked up work for RTA, dermac, emr and now obviously with Wassau and various other clients.
Colin Foreman :I think they've got quite an established footprint in Dubai. I think what has changed over the last four years is that the diversity of Chinese contractors working in Dubai has changed. So I would say in 2016, it was really China State and that was about it. Now there's quite a lot of other Chinese contractors coming into the market. I mean, notably, china Railway picked up the big tower project for Elhap Tour on Shakedide Road and they've picked up a couple of other major sort of building jobs. They've got a less sealed tower in Dubai Marina, so there's a lot more. There's a wider range of Chinese contractors in the market than there was even just five years ago, when it was it wasn't exclusively China State, but it was really dominated by China State. Now China State's still the largest, but not the only big Chinese player in the marketplace.
Jonathan:Okay, and any other? I mean we talked about Chinese contractors any other nationality contractors? European teams seem pulling out for sure.
Colin Foreman :I think you're seeing quite a few of the sort of the local companies that are stepping up, which are not necessarily.
Colin Foreman :I mean, they've got local partners but are often run by sort of regional people who've been established in Dubai for one or two generations. So there are some of those sort of people that were doing some of this, the smaller and were possibly considered sort of upper tier two before and now stepping up into the tier one space. I think that's probably the other trend that's been going on in the market and really I mean, I know Dubai does have some plans, but over the last five years they haven't awarded that many things big in terms of dollar value, but the engineering complexity of these things as well, where you actually do have to have an international contractor to get the thing done. There haven't been that many of those jobs. So the market's kind of evolved to see what's required, really, sure, yeah.
Jonathan:So it's more of a volume thing than our technicality, if you like, of those international and that will change next year.
Colin Foreman :I mean there's a metro tender coming out that will require international expertise. And then the broader UAE space. Abu Dhabi does have some big work. So there's obviously being Etihad rail going on, which in a way is a big part of the industry and it's got much interest and he's got quite a high Chinese involvement as well.
Jonathan:Yeah.
Colin Foreman :So there are some bigger infrastructure, the jobs that do require internationals, but I think that in terms of nationality, if you're looking at it from a nationality point of view, I think the Chinese are way ahead of everybody else. Okay, and if you want to shift that to Saudi, it's the same in Saudi Arabia Is it?
Jonathan:Yeah, okay, that's it. What about project timelines and programs and sort of delivery methods? Are they evolving? I mean, sadly, I guess few projects seem to be, certainly that we hear about seem to be completed sort of on program and on budget. There's too many sort of sad stories about projects being delayed and running over budget that we all hear about. Do you think the industry is becoming any more sophisticated down the way it delivers projects to become sort of more efficient?
Colin Foreman :do you think no, from my experience, I think that the market, the pressure to change, normally comes from the fact that they can't secure contractors to work on their projects. So in the UAE, although the competition has diminished, I don't think that's really become a concern, although a couple of those recent tenders might have raised a few alarm bells. But I still think for most of the work in the UAE they can secure the services of a contractor and then not. It's not like it was in 2008, say, in Abu Dhabi, when there was a real concern that they wouldn't get a contractor to do some of their big projects that they were planning. Yeah, that said in Saudi Arabia that those fears are very, very real. So you're starting to see quite a big difference in the way they're engaging the contractor market. So early contractor involvement's really become quite popular for a number of landmark schemes where they'll engage with two to three internationals getting on a two-stage tender basis and try and work with them through to award.
Colin Foreman :It's not been totally plain sailing on a lot of that, so I think it's still a little bit work in progress, but I think that's what drives the change. It's the fear of not getting a contractor. I'd say on board that things are late and there's all these issues, but from my experience that hasn't really been a driver for change. I think quite often that they've got the job late and they'll just kick that problem into the courts and they won't pay. And there's all that dispute and things that needs to be tidied up at the end. Yeah, sure.
Jonathan:Now again, you've referred to Saudi. We must spend a bit of time talking about Saudi, and I'm particularly. I guess I'm thinking in light of things, so I'm just picking these two again as examples. Really, I mean, they've been awarded expo 2030, isn't it? They've been awarded it, yes.
Colin Foreman :And they haven't got World Cup 2030 for that they only bid us, so it's almost certain that they will get it.
Jonathan:Yeah, and I mean, you know, as you said earlier, there's lots of, there's lots of other giga projects going on. But I just, I just wonder what, whether you give a view on what, what your view is of sustainability or achievability, realism, whatever word you want to use of some of those giga projects, I mean, is there a risk to any of them? Do you think some of them have been announced or already started? I'll leave you to decide, by the way, on which ones you want to be specific on or not.
Colin Foreman :Yeah, I mean my over simplistic way of explaining the Saudi market for people that experience Dubai, so it's a little bit of a Dubai centric view. Saudi Arabia is a bit like Dubai when it was booming across. You know, it's like several Dubai's in one country. So you've got Riyadh, you've got Jeddah, you've got Neon, so it's it's almost like several markets all all taking off at the same time.
Colin Foreman :I think that there is going to be, there's going to have to be a a decision taken on how things have phased. I think what's what's happened with Vision 2030 is there's a lot of projects been launched and, in fairness, this is sort of the marketing speak, but they've said you know it's a Vision 2030 project and you know people assume that means that the whole thing's going to be finished by Vision 20, by 2030. I don't think, realistically, that's ever been being on the cards. However, that hasn't been communicated and it hasn't been decided on, and that's going to have to happen over the next couple of years. As to you know, what parts of these projects are we actually going to deliver by 2030? Because we can't deliver all of it. You're seeing some, some hints of that starting to happen.
Colin Foreman :My view is that the the Expo in 2030 and the World Cup in 2034 gives them an opportunity to sort of introduce that phasing discussion with sort of quite a positive light. You know, if you look what happened in in Qatar and to also in Dubai for the Expo 2020, you know you get this idea that's hang on. We need to focus on delivering this. This is the most important thing, and some of those other things that we we wanted to do. We'll just sort of not necessarily put it on hold, but sort of put that into a bit of a less of a priority for your time being.
Colin Foreman :And I think that's going to happen, just because you know, just thinking about it logically, the scale of the development that they want to deliver, if it's, if that 2030 type frames actually what they're thinking of, it's just not going to get done. There's just not enough, there's not enough people, there's not enough contractors, there's not enough, but there's not enough finance available. Yeah, yeah. So there's, you know, and I don't want to sound negative when I'm saying that, you know, in some ways, I think that's really positive. I think they do need to say well, let's just focus on what we want to do and make sure we deliver that. And you know, even you know the scale of some of these things. Even if they deliver a you know 10% of it, it will still be an incredible undertaking if they deliver it.
Jonathan:But your view is it'll be a slippage rather than any stopping of any of the major projects.
Colin Foreman :Yeah, yeah, I mean, I think, I think you know things will get phased. I think there'll be, you know the inevitable, but you know we need to get that completed as phase one, and then phase two will be completed later on, and so on and so forth, and you know that's got to happen. You know they can't deliver all the things that they've been doing.
Jonathan:No, it'll just take a bit longer. Now, governments in the region undoubtedly play a crucial role in sort of shaping, if you like, the real estate market. How do government policies and regulations influence the construction and real estate market, and are there any changes that you know of on the horizon, anything that the industry, the wider industry, is closely watching or even hoping for, I guess?
Colin Foreman :I mean the big one. I mean you asked that question about private and public. I mean I mean in Saudi Arabia it's mostly public or government related entities and there hasn't been that much private sector involvement, if we sort of almost take a step back from the clients. You know, if you take Dubai as an example, there's government-related entities in Dubai doing lots of projects but they're using investors' money. You know they're using off-plan buyers. In Saudi Arabia there's been, you know, some of the home building, the sort of community stuff the local Saudis has been going on, but there's a feeling that the foreign ownership law will bring in a lot more investment. The word is that that will change. I was told at CitiScape in Ria that will change at the beginning of next year. If that happens and you have a lot of people looking to invest in property in Saudi Arabia that are expatriates, I think that could be a major change. That could change things considerably next year.
Jonathan:Yeah, okay, interesting. We'll keep an eye on that for sure. Now I wouldn't be able to get you on a podcast like this without asking you to get your crystal ball out, colin. So, and apologies, this is quite a long question, so just just bear with me if you wouldn't mind. As I say, get your crystal ball out. Where do you see the most significant opportunities for, I guess, continued growth on top of what we've already been talking about across the Middle East region over, let's say, the coming five years? Pick five years. And, equally, are there any risks or challenges that professionals in the industry should be aware of to be dealing with over that period, and are there any wild card factors that could significantly alter that trajectory? You think of the market? And finally, if you can touch on any sort of notable Key project opportunities that you know of coming, who've mentioned the Metro opportunities are coming up, but if there are any others, you can just highlight in brief, in brief terms, for for the listeners, that would be great.
Colin Foreman :Yeah, I mean the most significant opportunity we just want to talk about, the largest is still Saudi Arabia. There's a lot of very large projects that I mean. Some of them I haven't really even started. So you know, in terms of scale, it's it. I've really got to say it's Saudi Arabia that you know there's. There's all the issues that I just said about phasing and things, but you know, even if some of these very big schemes just just phase and scale back a little bit, it's still with just an enormous amount of work. Yeah, so that I have to say the most significant one is Saudi Arabia in terms of potential risk or challenges to industry professionals.
Colin Foreman :I Think that it's one of these markets where it's very busy. People are in demand. I think that, speaking to the certainly the sort of consultancies, and you know contractors and developers, you know they're all struggling to get hold of people, particularly into the locations that aren't necessarily so attractive. And then, once you get the people, keeping hold of the people's a challenge as well, because you might have a competitor or a client approach to people that you've got. So I think it's you know, it's retaining talent, or attracting talent, and retaining talent is a. It is a real challenge For the next year or two and you know I'm hearing that anecdotally all the time Sure Predictions for the future of the industry over the next five years.
Colin Foreman :The way things look at the moment, I think we're we're in the midst of a that a beam period. I personally have. I've really enjoyed 2023. It's been a very exciting year. What's going on, you know, on occasion I've sort of closed my eyes and it's felt like I've been in the sort of what was the bird's-to-buy, bird's-to-khalifa sort of days of Dubai, when you know we're doing the world's tallest tower and the world's biggest shopping mall all at once and we're doing them. You know there's all that sort of all that sort of thing going on. So it's been really exciting, you know, and, as I said, those projects are just starting, so there should be a few more years of it Coming through.
Colin Foreman :Yeah, wild card factors I mean we've had a few this year. I mean, expo was a little bit expected because we knew Saudi Arabia was gonna bid for that. Look, the World Cup, we sort of knew was on the agenda, but for that to have played out as quickly as it did was was really quite a surprise. I think it'll be quite interesting to see what Dubai does with itself. I mean, they've They've really, just in the last week, had a sort of a bookend to the sort of expo cop yeah in plan that they've had. I mean, expo was on the agenda for since 2013 and then, during expo itself, they announced that they were going to host copper expo. So that's now sort of come to an end. So Dubai I think Dubai's economy is morphed and doesn't necessarily need an event to be an event driven economy. But they'll be interesting to see if maybe Dubai positions itself for something, something in the future. You can never really rule Dubai out for nothing. So that could be a could be a wild card, a wild card factor. I think.
Colin Foreman :The other thing which I haven't mentioned, which isn't necessarily a wild card, but I think it's really just important to to add to the discussion, is there's been a lot more Cooperation within the GCC since the Alhula agreement and a lot of projects to connect the region up, particularly on the the transport side, but to a lesser extent on utilities as well.
Colin Foreman :So the GCC rails back on the agenda. You know this high-speed rail links between major capital, so there's an awful lot of work. That's sort of tying the region together and that should, that should improve it, so that the way the economy is performed as well We'll get more diversification. You know supply chain becomes more integrated. You know it becomes a little bit more. I mean it's still very early days, but it's sort of, you know, it's in some ways following the sort of EU model, but a very early stage. So I think that's, that's really quite a big opportunity, when you think about it, for the, for the long term, probably even beyond the five years. You know you can, you can be putting equipment and goods onto a train and in buff rain to go to, you know, to go to Wightman, for example, yeah, so there's quite a lot of positive change going on there, that's very interesting because I mean what that also does is not not only the opportunity itself.
Jonathan:You know the actual railway project and what it could probably do also is open up all sorts of other development opportunities. You know, as you say happens, happens in other parts of the world where New transport links open up development opportunities, sort of alongside them, if you like. So you could see lots of spin-off, you know, as well as the project itself, there could be lots of, lots of other spin-off opportunities. Yeah, I mean, I mean one example is the sort of the car industry.
Colin Foreman :I mean there's various people now looking to position themselves in. You know car assembly and you know that supply chain if there's a good rail industry and good transport links could Doesn't have to be in the same location. You know you could move parts and equipments from from one market to the other quite quickly. So I think that's.
Colin Foreman :I think that's quite an interesting trend, very in terms of Key project opportunities coming up. I mean I could do all the obvious ones in Saudi Arabia now, all the big gig of projects which have got a lot on. So you know this. I mean there's neon and its various components, so the line oxagon, trajina, the Red Sea project, the Marla Russian has a lot of work. The Kidia, the Diria gate and and then all sorts of other things like in a King Salman Park, sports Boulevard, new Maraba, the Jedder Airport. You know, the Sousy language is starting to move it.
Colin Foreman :Yeah, yeah, well said the list goes on in the I already said, the UAE, I already said that the buying, the buying Metro. I think the other interesting one which I have had a bit of a you know I've written about this project for a number of years is Mac team international airport in Jabba Lalee. Okay, that's that. That seems to be back on the agenda. For me that's one of the most interesting projects in the region.
Colin Foreman :Given that You've got this, you've got this challenge that you're trying to move one of the world's biggest and busiest airlines internationally that operates from a hub To a new airport. So you can't Do it very easily by phasing it or having two airports open at the same time. They really sort of needs to be moved in one go, which means you need a very large airport delivered in in in one hit. So I think that's going to be fascinating to see how, how that develops. But you know we've been, we've been talking and I've been reporting on that for for quite a long time now.
Colin Foreman :But I think anyone that's gone through Dubai international airport recently will feel that that airport Starting now to feel that it's you know, it's, it's, it's reached, it, reached it sort of it toward the sort of the final stages of its life and it needs. It needs something bigger now. And the issue then it again is runways as well, it's course. Yeah, space, okay, that's interesting. So I personally think that the mac 2 ones, the mac 2 mac ones, very interesting, but the Saudi Arabia's got got everything down some more.
Jonathan:Yeah, okay, all right now. We try to keep these podcasts. We've always made a commitment. We try to keep these podcasts for around 30 minutes, colin, I I think we've got an exception today because we've been fortunate enough to get you, um, on the call and and indeed we could have gone on for a lot longer. We really could have lots of things. We haven't. We haven't had time to discuss Um, so I think we'll be excused for letting it run a little bit longer, but sadly our time is up. It's been, it's been great speaking with you, colin, as it's always been over the years that we've we've known each other, um, it's been extremely informative, informative and interesting. So thank thank you for that. Before I do let you go, one thing we Um like to do on on all the podcasts is is is to get the guests to leave the listeners with a key takeaway or a nugget of information, or some sort of Message, if you like. If you were to offer one piece or advice to the listeners or takeaway to the listeners, what, what would it be?
Colin Foreman :I'd offer two that are a bit related. Um, I still think that the oil price is important, so I check the oil price regularly, and I think the other one, which is particularly relevant at the moment when there's a lot of things happening geopolitically the people that are making project decisions are often the same people that are making geopolitical decisions, so quite often some of those project decisions are in the same entree as Um other things that are more pressing and you often get delayed, so that's something that I'm Just keeping an ear out for in the moment.
Jonathan:Yeah, very, very well put. Actually, I thought your other nugget was going to be um. To tell all the listeners, if they do want all of this project information, they need to be subscribed, if they're not already, by the way, they need to be subscribing to Um to meet projects. So we will put the links in the in the in the notes, as I say. But listen, colin, thank you very, very much for joining me. Um, it's been great. We wish you and everyone at me actually continued success for All all the incredibly useful and informative work that you, you guys, do through 2024 and beyond. Um and finally, can I wish you and everyone a very happy Christmas. Thank you, colin, very much.
Colin Foreman :Thank you very much, jonathan. Always great to speak.
Jonathan:Thank you Likewise, really enjoyed it. Thank you, bye, bye, and so that brings an end to this first series of the Middle East construction real estate podcast. Thank you for listening to this one or any of the previous episodes. We hope you've enjoyed and found them informative and interesting. It would really help us if you could like or subscribe on our LinkedIn or Instagram pages. Thank you. A big thank you also to the team behind the scenes who do all the real work in getting these podcasts prepared, edited and ready to be posted for you to listen to. For the next series, we will be looking for sponsors to help us, so if you are interested in sponsoring a future episode or the series, please get in touch. Please also let us know if you have any suggestions for future topics or speakers. The next series will be coming out in the new year, so please watch out for the notices on our social channels Until next time. Thank you to each and every one of you for listening.