AECOM-Hand Book

Middle East
PROPERTY &
CONSTRUCTION
Handbook
20
20
Middle East Property & Construction Handbook 2020
Front cover
Al Janoub Stadium, Al Wakrah, Qatar
Image courtesy of Hufton+Crow
FOREWORD
Welcome to the Middle East In this thirteenth edition of the
Property & Construction publication we’ve included four
Handbook 2020. As a company thought leadership articles
committed to building a better written by AECOM experts that
world, we’re always looking address key issues affecting the
to improve and strengthen region as it strives to become
how we do things from our more resilient, digitally enabled
delivery of projects to the and better connected; planning
research we conduct and for asset retirement, future
conversations we share with office trends, the expansion
colleagues and clients. of aviation facilities and the
application of blockchain in the
Our goal is to unlock the construction industry.
transformational change and
innovation required to move the In this year’s MENA Economic
industry forward. Review, we take stock of
the region’s economic and
construction performance
and reveal the changes we
see ahead.
By keeping the conversation

going and by working together
we will be better prepared for
the future and able to make the
most of upcoming opportunities.
We hope you will enjoy reading

this year’s edition, and we look
forward to working with you to
build a more sustainable and
connected future.
As with previous years we continue to

seek feedback in everything we do.
Please contact the editors, Marc Gibbons &
Laura Morgan via bi_middleeast@aecom.com
for further information.
Wahat Al Karama, Abu Dhabi, U.A.E.
AECOM
Contents
01 ECONOMIC ROUND UP
08 15 22
Global Global MENA
economic review construction economic review
prospects
02 ARTICLES
38 44 62 70
Planning for asset Airport facilities and Future office trends The application of
retirement commercial and commercial blockchain in the
benchmarking office tower cost U.A.E. construction
model industry
03 REFERENCE ARTICLES
74 78 83
Procurement Middle East Building regulations
routes forms of contract & compliance
04 REFERENCE DATA
92
International building
100
Regional building
102
MEP costs
104
Major measured
cost comparison cost comparison unit rates
105 106 107 108

Major Labour costs U.A.E. indices Typical building
material prices services standards
for offices
109 110
Exchange rates Weights and
measures
05 DIRECTORY OF OFFICES
114
Directory of offices
6
AECOM
01
ECONOMIC
ROUND UP
IN BRIEF
08 15 22
Global Global MENA
economic review construction markets economic review
7
GLOBAL
ECONOMIC
REVIEW
2019 was reported as
an unfavourable year for
global growth with general
momentum remaining fragile
and risk factors such as trade
barriers affecting potential
growth. The World Bank
highlights that policymakers
have a range of options to
boost investment and growth.
In light of risks and challenges,
significant policy adjustments
are needed with decisive
action delivering stronger
development outcomes
for countries.
8
AECOM
As reported by The World Bank, global growth for 2019 has been downgraded to 2.6%, approximately 0.3%
lower than earlier forecasts. This is mainly due to weaker-than-expected international trade and investment
at the start of 2019. Growth is expected to rise gradually by 2021 to a projected 2.8%. According to The
World Bank Group, during a period of slowed investment global trade has weakened and elevated trade
uncertainty. Increased tariffs by the United States and retaliations from China and other trading partners
have affected trade flows and prices. Real GDP growth will be reliant on trade tensions easing between
major economies, new stimulus measures implemented in China (and the Euro Area) and increased
domestic demand in some emerging markets and developing economies (EMDEs).
Real GDP growth
4.0%
2.6%
1.7%
Source: World Bank Economic Prospects, August 2019
Growth in volume of exports of goods and services
1.9%
0.9%
1.3%
Source: IMF, World Economic Outlook, November 2019
9
The global composite Purchasing Managers’ Index (PMI) is affected from the
downturn in manufacturing, as JP Morgan reported for 2019. The PMI declined
during Q2-3 of 2019 due to many domestic markets remaining soft and
international trade volumes continuing to contract. Market conditions will need to
perform a strong recovery to signal improvements to PMI growth. The global rate
of increase of all-industry new orders remained uninspiring midway through Q2
2019, continuing a decline in new export orders for goods and services.
Global composite PMI
52.8
51.2
Source: JP Morgan
10
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COMMODITIES
Commodity prices recovered in the first half of 2019 following declines in 2018, however they have
remained below the previous year’s peak values. Heightened trade tensions have affected prices of some
commodities; particularly metals. Price forecast levels are lowered upon reflection of weaker-than-expected
global growth.
Growth in commodity prices
2.0%
Source: IMF, World Economic Outlook, August 2019
Commodity indices
Index, 2005=100
Commodity Price Index includes both fuel and non-fuel price indices
Industrial inputs (includes agricultural raw materials and metals)
Commodity fuel (includes crude oil, natural gas and coal)
Metal (includes copper, aluminium, iron ore, tin, nickel, zinc, lead and uranium)
11
Oil prices
In 2019, production cuts against oil supported higher oil prices, which led to an improvement on the
decline at the end of 2018. The World Bank reports future oil prices are vulnerable to risks, such as policy
outcomes around further production cuts, impact of the removal of waivers to the U.S. sanctions on Iran
and the effect of the International Maritime Organisation’s sulfur emissions regulation, which takes effect
in January 2020. Future geopolitical events and weaker-than-expected growth in major oil consumers will
also impact prices beyond 2020.
Anticipated changes in crude oil supply
Source: OPEC, World Oil Outlook 2040
Changes in oil demand growth
Source: OPEC, World Oil Outlook 2040
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Annual oil demand increments by region, 2018-2023
OPEC Secretariat
Metals
Metal prices are expected to The World Bank reports that Copper imports from China could
continue their recovery into there is a balance in risks around be set to rise after value added
2020, after the drop in late 2018. prices linked to China-U.S. trade tax cuts in Q2 2019, which could
Supply concerns, specifically to negotiations and the possible lead to investment in related
copper and troubles surrounding impact of growing demand infrastructure projects. A rise in
iron ore production will impact from China. future aluminium prices may not
future prices. look as positive as compared to
copper and iron ore.
Changes in metal prices
Copper, grade A cathode, LME spot price, CIF European ports
Aluminium, 99.5% minimum purity, LME spot price, CIF U.K. ports
Iron ore, China import iron ore fines 62% FE spot, CFR Tinajin port
13
GLOBAL ECONOMIC MARKET

− Climate change is impacting China retaliated in Q2 of 2019 Risks to the EDMEs include
global economies according against the U.S. by raising slow investments and rising
to IMF and studies conducted tariffs of U.S. imports. The trade barriers. Stronger
by universities in the U.K. and impact will pass through the economic growth from
U.S., after many countries supply chain of other world structural reforms is crucial to
experienced soaring economies due to a general improving living standards.
temperatures in 2019. The slow in exporting goods.
forecast for increasing − National policy actions
temperatures across − Emerging markets and are key for global growth,
the globe could impact developing economies reducing trade and
agricultural markets, labour (EDMEs) have experienced technology tensions and
productivity and thus impact softened inflation in 2019 mitigating uncertainty around
future GDP growth. and some countries faced trade agreements. This is
financial strain. Although particularly relevant to China-
− Potential new trade tariffs debt has increased across U.S. trade and the U.K. market
between China and the U.S. these markets the economies due to prolonged uncertainty
in Q4 of 2019 could impact are expected to grow of Brexit.
the Chinese economy with a throughout 2020, albeit at a
weakened GDP growth. measured rate.
Global EPU index with PPP adjusted GDP weights

* U.S. - China trade uncertainty
* U.S. - Mexico tariffs
U.S. tariffs
U.K. Brexit
Source: Economic Policy Uncertainty
14
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GLOBAL
CONSTRUCTION
PROSPECTS
Responsibility is placed on governments
The forecast review period is globally for investment in infrastructure
analysed between 2019-2023. projects, reducing risk over trade deals
In 2019, generally all global and the support of improved financing to
assist the construction sector. Most global
economies revised their construction markets are expected to
construction growth rate and improve from around midway to the end of
reported a slowing construction the review period (2019-2023) supporting
a steady growth forecast for global
output compared to the construction output.
previous review period.
Global News Wire reported that global
construction output is set to rise to 3.5%
in 2020, this growth is due to construction
activity in emerging markets. It is anticipated
that during 2020 established markets, like
the U.K. and the U.S., will be impacted due
to Brexit uncertainty and trade tensions
respectively.Asia-Pacific has a more positive
outlook and currently holds the largest share
in the global construction industry and is
forecasted to maintain a growth rate to 4.4%
during the forecast period.
15
North America
2018 was a healthy year for the U.S. and Canada construction industries, with
continuous growth forecasted over the period 2019-2024, as reported by
Mordor Intelligence.
The North American construction for 2019 and this is forecasted Continued growth is reliant
industry growth is reliant on to reach $1.45 trillion by the on investment from the U.S.
easing trade tensions and a end of the review period (2023). government in infrastructure
general economic growth uplift. The U.S. is faced with increasing projects such as roads, energy
For the U.S., construction is construction costs for materials and utilities, and expansion of
the largest contributor to the and labour, which could affect the communication networks over
economy with an anticipated cost of delivering projects. the forecasted years.
value of $1.3 trillion (Statista)
North America GDP from construction ($Bn)
North America GDP from construction ($Bn)
Canada, USD
105
United States, USD
Source: Trading Economics

662 1. Trading Economics 2. IMF
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Latin America
Across Latin America construction growth expanded at a moderate pace in

2019, at approximately 1.1%. This is expected to continue throughout 2020, a
greater growth rate is forecasted from 2020 through to 2023 of 2.6% (average,
annually) according to KHL.
For 2019, Mexico held the highest

construction industry value (GDP
Latin America GDP from construction ($Bn)
from construction) improving on
the 2018 results and this is set to
grow consecutively to 2023. Brazil, Bolivia, USD
Colombia and Chile, which follow Brazil, USD
0.1
as the highest value construction
markets in the region, all recorded
3 Chile, USD
a slump for 2019. This is expected 3
to pick up from 2020-2023. Colombia, USD
Argentina, USD
The economy growth rate will 0.4 5

be supported by investments Peru, USD
in the mining sector (Peru), a Mexico, USD 2
strengthening oil and gas market
(Colombia) and investment in 68
public infrastructure. Chile’s
construction sector will benefit
from a healthy pipeline of
projects driven by positive
commodity prices.
Latin America GDP from construction ($Bn)
Source: Trading Economics 1. Trading Economics 2. IMF
17
Europe
It was reported that the Euroconstruct area experienced a growth rate of 3.1%
for 2018, equating to 1,610 billion Euro followed by a moderate growth forecast
rate of less than 2% for 2019.
Euro area GDP vs. construction output
Infrastructure will be the key
market within the region over
the review period to 2023 to
maintain construction growth.
France will contribute towards
this by implementing upgrades
to transport infrastructure to
meet the country’s expanding
demands, and perhaps preparing
for the 2024 Summer Olympics,
and emphasis placed on the
German government investing
in the country’s transport
infrastructure.
Despite the threat of Brexit

potentially affecting the U.K.
(construction) economy, it is
envisaged to be the leading
construction market by 2030.
Compared to Asia, Europe is
falling behind with investments
made to the much-needed Europe GDP from construction ($Bn)
infrastructure sector, with
developed countries in Asia Switzerland, USD Turkey, USD
8 6
investing approximately 36.8%
of the collective GDP opposed
to 21% from the Euro Zone.
Bloomberg Intelligence suggests Spain, USD France, USD
construction infrastructure
expenditure could reach up to $1
19 32
trillion over the next 10 years – Netherlands, USD
Germany, USD
8
including infrastructure sectors
such as energy and transport.
48
U.K., USD
37
Russia, USD Italy, USD
22 18
Source: Euroconstruct 1. Trading Economics 2. IMF
18
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Africa
In 2019 The World Bank reported sub-Saharan Africa overall

GDP grew from 2018 to a rate of 3.4%.
Political uncertainty African governments and other There are limitations that
and weakening economic institutions; in 2016 42% of could hinder the success of
reforms could hinder future infrastructure funding came from infrastructure development,
economic growth. The region African governments (OECD). In however this could be
requires continual investment 2019, OECD reported Africa’s mitigated by improving
in infrastructure to meet its infrastructure needs remain financing constraints and the
development objectives. OECD substantial with a demand value implementation of new public-
identifies the objective aims of up to $152 billion over the private partnership (PPP)
to support Africa’s integration next decade equivalent of up opportunities.
and growth by easing trade and to 6.9% of GDP.
adoption of new technologies.
The plan would establish Africa’s Angola, USD Ghana, USD

in-land transport corridors or
developing the Trans-African
0.1 0.7
Highway network — this in turn Tanzania, USD
0.8
would support Africa’s trade Kenya, USD
volumes, which are currently
affected by underdeveloped
0.7
infrastructure networks. Nigeria, USD
South Africa, USD
Infrastructure finance is
provided by both 7 2
Africa GDP from construction ($Bn)
19
Asia
China, Japan and India hold the largest value of construction within the Asia
region, however construction generally is not the largest contributor to the
country’s GDP output.
Southeast Asia has the fastest Singapore’s construction market

growing construction economy also grew steadily in 2019 and
of the region and the Philippines is expected to be influenced in
and Vietnam are third and the future by the governments
fifth respectively worldwide implementation of Integrated
for construction growth (as Digital Delivery (IDD).
of 2019 according to Asia
Property Awards). Manilla should Asia GDP from construction ($Bn)
benefit from the government’s
investment plans to improve
Malaysia, USD South Korea, USD
travel around the city and access
to the airports, which in turn will 4 19
create job opportunities and Kazakhstan, USD
6
encourage economic growth.
The Malaysian construction
sector is also strong ranking
globally at 15th supported by Japan, USD
government plans for affordable
housing, the country’s market is
277
growing albeit at a slower pace. Indonesia, USD
19
India, USD
38 China, USD
620
20
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Australia
Over the review period from 2019-2023, Australia’s construction industry output
is expected to rise, an improvement compared against the previous review
period (2014-2018). KHL reports that the construction industry is estimated to
grow by an annual growth rate of over 2%.
2019 recorded a loss in

growth momentum which is
Australasia GDP from construction ($Bn)
expected to return in 2020.
The residential sector was a
key market in previous years, New Zealand, USD Australia, USD
however transport infrastructure,
in particular the aviation
2 24
sector, could be the biggest
construction contributor
through to 2023.
New Zealand, like Australia and

other regions, is focusing on
infrastructure construction to
meet population growth and
current demand. This will consist
of services and utilities and
transportation including roads.
According to Stats New Zealand
construction was the largest
contributor to New Zealand’s
GDP during mid 2019.
21
MENA
ECONOMIC
REVIEW
Growth in the Middle East and North Africa is
anticipated to grow at a subdued rate of 0.6% in
2019 and rise to 2.9% in 2021, reported by
The World Bank in October 2019. This is a
broader forecasted range than previously of
3.2%-3.5% between 2018 and 2022.
Oil growth prospects and oil price certainty
are key factors for the MENA region and
deeper reforms are required to encourage
growth. According to the IMF, public debt
is still a risk within the region as increased
borrowing has meant higher interest
expenditures. Egypt and Morocco remain
as the greater performers for GDP growth
compared against others in the region.
GCC country forecasts suggests an improved

growth rate led by infrastructure investment
within the Emirate of Dubai, an economic
stimulus package for Abu Dhabi and Saudi
Arabia’s economy benefitting from higher oil
prices from 2020.
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The IMF reported a decline in GDP in 2019 for the world, emerging markets and MENA.
GDP growth is expected to rise for 2020 and remain at a steady pace to the end of the forecast period.
MENA region growth could see a drop off in 2021 and remain at a parallel growth through to 2023.
World, EMDEs and MENA, GDP growth at constant prices
4.4
3.3
1.3
Source: IMF World Economic Outlook, September 2019
Selected MENA countries, GDP growth at constant prices
1.3
Source: IMF World Economic Outlook, September 2019
23
Budget balance for selected MENA countries
Source: Haver Analytics, Emirates NBD Research
GDP annual growth rate (%)
Source: Trading Economics
24
AECOM
INSIGHT: SAUDI ARABIA

Emirates NBD reports that for This was closely followed by MEED reported in September
the first half of 2019 spending health and social development, 2019 that Saudi Arabia held a
on economic resources grew where investments include 46% share in GCC planned and
from the previous year. This spending on construction and projects underway.
expenditure could be related equipment for hospitals, primary
to the country’s Vison 2030, healthcare centres, sports Fiscal indicators for Saudi
associated to ‘mega projects’ and facilities and amusement parks. Arabia are forecasted for 2020
developing infrastructure relating by Emirates NBD against the
to water, sanitation and renewable Arabian Business reports that percentage GDP. This provides
energy schemes. Saudi Arabia could be the an anticipated insight into the
main contributor to growth in country’s financial economic
Another significant spend construction activity for 2020 plans to the end of the year
increase was seen in infrastructure across the Middle East, with a with government expenditure
and transportation. Expenditure reported $1.6 trillion worth of estimated at circa 35%.
on defence held the largest projects amounting to 5,000
proportion with a 20.3% share of in total currently in the pre-
the overall spend. execution stage.
Saudi Arabia fiscal indicators
Source: Haver Analytics, Emirates NBD Research
Saudi Arabia expenditure 2019e
20% 19%
5%
19% 9%
10%
18%
Source: Emirates NBD Research
25
Town Square, Dubai, U.A.E.

Image courtesy of Nshama
MENA GROWTH PROSPECTS

OUTLOOK AND RISKS 2020-2021
MENA real GDP growth is with the risk of prices becoming The World Bank also places
predicted by MEED at 1.3% for more volatile. Oil importing emphasis on the need for
2019 and with an estimated countries are leading the growth international trade reforms for
growth of 3.2% for 2020. The within the region with Egypt being MENA and encouraging their
main risks faced by MENA growth an emerging growth star. It is participation in the global value
is the expected slowdown of the reported that implementation of chain and production, which in
region’s largest export markets value-added tax (VAT) aids fiscal turn will create opportunities
including the European Union reforms and boosts revenue. for firms and workers in the
and United States. Looking into In 2019, Bahrain introduced a region. In support of regional
the medium term, the World standard rate of 5% VAT following growth, a number of business-
Bank expects the strengthening the U.A.E. in 2018 and Egypt friendly reforms have been
economy will be driven by in 2016 whereby introducing a implemented by MENA countries.
policy reforms diversifying the rate of 13% resulted in a 30%
economy and strengthening the increase in government tax
business environment, although revenue the following year.
the oil price could impact this
26
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Key business-friendly reforms in MENA

Economy Reform
UAE - Starting a business made less expensive by reduced fees for business incorporation.
(16) - Construction permit process simplified using a risk-based approach to reduce the number of inspections.
- Increased minority investor protections by providing for disqualification of directors in cases of prejudicial
conflicts of interest.
- Value added tax introduced.
- Cross-border trading made easier by reducing the time to export by fully digitising certificates of origin and the cost
to import by issuing certificates of conformity that cover multiple shipments.
Morocco - Construction permit process made easier by an improved online platform and further streamlining of the process,
(53) making it possible to apply for and obtain certificates of conformity online.
- Getting electricity made easier by generalising online applications for new connections and expanding the use of
prebuilt transformers.
- Strengthened minority investor protections by expanding shareholders’ role in major transactions, promoting
independent directors, increasing transparency on directors’ employment in other companies, and making it easier
to request general meetings.
- Corporate income tax rate reduced.
- Cross-border trade enhanced through the introducion of e-payment for port fees, streamlined paperless customs
clearance, and extended port hours of operation.
- Enforcing contracts made easier by introducing an automated system that randomly assigns cases to judges and
by publishing court measurement performance reports.
Oman - Getting electricity made faster by investing in prepaid meters and enforcing service delivery time frames.
(68) - Registering property made faster by reducing the time to issue deeds and improved its land administration system
by publishing official service standards on property transfers.
- Strengthened minority investor protections by increasing shareholder rights as well as clarifying ownership and
control structures.
- Import and export process improved by upgrading infrastructure at the Sohar Port as well as introducing risk-based
inspections and post clearance audits.
Qatar - Getting electricity made faster by reducing the time to process online applications for a new connection.
(77) - Property registration made easier by streamlining property registration procedures. Qatar also improved the quality
of its land administration system by publishing official service standards on property transfers and court statistics
on land disputes for the previous calendar year.
- Improved access to credit information by reporting credit data from a telecommunications company.
Saudi - Improved the reliability of electricity supply by imposing a new compensation scheme to incentivise the utility to
Arabia improve service reliability.
(62) - Strengthened minority investor protections by providing clear rules for the liability of directors and increasing the
role of shareholders in major decisions.
- Made exporting and importing easier by launching a new electronic single window and extending the hours of
operation of customs at the Jeddah port.
- Made enforcing contracts easier by introducing an e-system that allows plaintiffs to file the initial complaint
electronically and amending the civil procedure rules to introduce time standards for key court events.
Kuwait - Starting a business made easier by merging procedures to obtain a commercial license and streamlining online
(83) company registration.
- Dealing with constructions permits made easier by streamlining its permitting process, integrating additional
authorities to its electronic permitting platform, enhancing interagency communication, and reducing the time to
obtain a construction permit.
- Getting electricity made easier by digitising the application process, streamlining connection works and meter
installations, and using a geographic information system to review connection requests.
- Property registration made easier by streamlining the inspection and registration processes. also improved the
quality of its land administration system by publishing official service standards on property transfers.
- Improved access to credit information by guaranteeing borrowers the legal right to inspect their credit data and
offering credit scores as a value-added service to banks and financial institutions.
- Strengthened minority investor protections by providing a 21-day notice for general assembly meetings.
- Made trading across borders easier by improving the custom’s risk management system and implementing a new
electronic clearance system.
Egypt - Made starting a business easier by abolishing the requirement to obtain a certificate of nonconfusion and
(114) improving its one-stop shop.
- Improved the reliability of electricity supply by implementing automated systems to monitor and report
power outages.
- Strengthened minority investor protections by requiring shareholder approval when listed companies issue
new shares.
- Made paying taxes easier by implementing an online system for filing and payment of corporate income tax and
value added tax.
Source: The World Bank Doing Business 2020
27
GLOBAL AND MENA FACTS,

RISKS AND CHALLENGES
2018 was the Algeria had Youth Geopolitical Global Trade

4th warmest the hottest unemployment shifts energy shifts wars
year on record temperature
recorded at
51.3⁰C across the
MENA region
TOP GLOBAL RISKS IDENTIFIED

FROM THE WORLD ECONOMIC FORUM
The World Economic Forum provides a risk assessment of both global and local perspectives,
across all markets, industries and regions.
Top five global risks in terms of likelihood Top five global risks in terms of impact
(Next 10 years) (Next 10 years)
2017 2018 2019 2017 2018 2019
Extreme Extreme Extreme Weapons Weapons Weapons
1st weather weather weather of mass of mass of mass
events events events destruction destruction destruction
Failure of Failure of
Large-scale Extreme Extreme
Natural climate-change climate-change
2nd involuntary
disasters mitigation and
weather weather
mitigation and
migration events events
adaptation adaptation
Extreme
Major natural Natural Natural
3rd disasters
Cyber-attacks
disasters
Water crises
disasters
weather
events
Failure of
Large-scale Data Data Major natural climate-change
4 th
terrorist attacks fraud or theft fraud or theft disasters mitigation and
Water crises
adaptation
Massive Failure of Failure of
incident climate-change climate-change Natural
5 th
of data mitigation and
Cyber-attacks
mitigation and
Water crises
disasters
fraud/theft adaptation adaptation
Societal Geopolitical Environmental Technological
Source: World Economic Forum Global Risks Perception Survey 2018-2019. (Adapted from Global Risks Report 2019)
28
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MENA RISKS
As part of the MENA Executive Option Survey, business leaders in the region identified the primary risks
as economic and governance issues, perhaps underestimating the risk of climate change. The list also
highlights the dependency of many MENA economies on oil and gas industries.
1 Energy price shock 6 Cyber-attacks
2 Unemployment or
underemployment 7 Unmanageable inflation
3 Terrorist attacks 8 Water crises
4 Failure or regional and global

governance 9 Illicit trade
5 Fiscal crisis 10
Failure of financial
mechanism or institution
Source: World Economic Forum, Regional Risks for Doing Business 2018
29
MENA CONSTRUCTION MARKET

Although 2019 was a challenging year for The MENA construction industry is estimated
the construction market within the MENA to grow at a reasonable pace during 2019 and
region and other global markets, a positive into 2020 with Oman, Egypt and Iraq set to see
outlook is forecasted into 2020 and beyond. the strongest growth in the Middle East and
North African markets.
MEED reports that 2019 was a challenging

year for the projects market which fell below
the expected forecast at the start of last year.
Egypt and Saudi Arabia appear to be the
strongest countries for construction output
and real estate opportunities. Strengthening
oil prices could provide a positive outlook for
construction growth moving into 2020.
Project awards in the Middle East and North Africa by sector, 2008-2019 ($Bn)
Source: MEED 2019 Q1-Q3
30
AECOM
Reem Mall, Abu Dhabi, U.A.E.

Image courtesy of Al Farwaniya Property Developments LLC
The Middle East should Saudi Arabia announced a The construction market is
see a recovery in the construction projects list in 2019, predicted to record a compound
construction market which comprises a range of annual growth rate (CAGR) of 6%
after 2019, which could ‘gigaprojects’ to urban schemes, between 2019-2024 according
be supported by a rise with construction being at the to Mordor Intelligence. Vision
in oil prices, government forefront for job creation. Some 2030, introduced in 2016, is set
investment support and of the larger and most talked- to transform the country and
global demands. MEED about developments include diversify the economy away from
reports that these factors Riyadh Metro, The Red Sea oil. The vision will see an increase
will be key drivers for Development Project, Neom and in non-oil investment with growth
capital and infrastructure social infrastructure schemes instead being derived from
projects, with several like the Ministry of Housing’s tourism and foreign investment.
pending projects within Sakani homes and energy
the GCC region associated megaprojects. Neom is currently
with transport, social the most prevalent and is cited
infrastructure and tourism by Construction Week as “the
among the key topics. centrepiece of Saudi Arabia’s
gigaproject ecosystem and the
Vision 2030 programme”.
31
Qatar’s construction output The prospects for North Africa Although North Africa does
growth was estimated at has a key focus on Egypt. IMF not hold the highest number of
30% for 2019 with continued reports that the population projects across Africa as a whole,
construction plans in place reached 99.2 million as of 2019 it holds the largest share for
preparing for the FIFA World and is expected to reach over 100 construction projects in terms
Cup 2022. Leading up to 2019, million in the near future. With this of value.
the country’s key focus was growth in mind the demand for
developing sporting, transport new cities and increased housing Across the Gulf region, MEED
and tourist infrastructure. Moving is likely to support increased reported that for 2019 (Q1-Q3),
forward, another objective for construction developments. transport, oil and gas were the
Qatar is positioning themselves Egypt generally has a number of largest value of awarded projects
as a cultural destination. Currently ongoing large-scale construction in 2019.
the country’s largest projects projects, including the world’s
include the expansion of Hamad largest museum and an oil refinery
International Airport, Lusail Plaza facility, which is cited by KHL as
Towers and Doha Metro. In 2018, being one of the country’s largest
MEED reported that Qatar had projects aiming to reduce Egypt’s
the third highest value of awarded dependence on imported diesel
construction contracts in the by an estimated 40%.
GCC, behind Saudi Arabia
and the U.A.E.
Gulf projects awarded % 2019
Gas Construction
17 %
24%
Oil
17%
Industrial
3%
Transport
Power
18%
8 %
Water
Chemical 9%
4%
Source: MEED 2019 Q1-Q3
32
AECOM
Construction output annual growth 2018-2020f (%)
Growth rate in regional construction market

Based on 2019f construction output forecast
U.A.E. Egypt
6 %
11%
Qatar
15%
Oman
Saudi Arabia
12%
6 %
Source: BMI research/Mace Group
33
MIDDLE EAST TRENDS

A report in 2019 by RICS estimated that the A key trend seen in many disputes across the
current total value of GCC construction projects Middle East was unsuccessful administration
was $2.3 trillion. This is expected to grow in of the contract at the offset and lack of
line with the GCC population and evolving collaboration. General improvement of
economies away from the historical norm. The relationships between parties and a ‘conflict
GCC construction industry still faces an above avoidance’ approach can resolve issues and
global average rate of disputes, with construction avoid legal action. Adequate risk management
projects under immense pressure to finish on time implemented early on in construction contracts
and within budget. The industry sees reoccurring can also assist in preventing programme
themes causing delays, which can be mitigated in (and cost) over runs. The key benefits to risk
future. Risk factors that can have a major impact management on construction projects include:
on the successful completion of projects include
the following: – Implementation of a formal process for the
identification, assessment and evaluation of
– Finance constraints and slow payments risks and opportunities.
– Ineffective planning and scheduling (derived – Establishing a rational method for calculating
from unrealistic timescales/estimation and realistic and defendable contingencies for cost
completion dates) and programme.
– Shortage of materials – Increasing the comprehension and the ability of
– Inadequate site management stakeholders to influence the project outcomes.
– Design change by owners – Assisting in the decision making and evaluating
alternative options.
– Slow decision making
– Providing managers with the means to decide
– Delays by subcontractors
where best to invest the project’s time and
– Slow process of permits/delays in obtaining money.
government approvals
– Ensuring the procurement route and contract’s
– Weather conditions conditions reflect the risk appetite and project
– Unsuitable procurement method objectives.
– Inaccurate or unaligned cost estimation.
Following recommended guidelines and solutions
surrounding risk management and alternative
dispute resolution can in turn create positive
change throughout the construction industry.
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COUNTRY STATISTICS
Key data for MENA country’s present statistical growth and forecasts for 2019. The table identifies the
country’s GDP value, import and exports against GDP, population growth and, where possible, construction
market data.
Saudi
Algeria Bahrain Egypt Iran Iraq Jordan Kuwait Oman Qatar UAE
Arabia
Land area, ‘000 km2

2,382 0.78 995 1,629 434 89 18 310 2,150 12 71
(1)
Abu
Capital city Algiers Manama Cairo Tehran Baghdad Amman Kuwait Muscat Riyadh Doha
Dhabi
Population, million,
43.41 1.51 99.21 83.27 39.12 10.1 4.7 4.31 34.1 2.75 10.75
2019f (2)
Population growth,
CAGR 2019-2023 1.76 1.99 2.30 1.00 2.60 0.99 2.79 3.12 2.00 0.25 3.06
(CAGR %) (2)
GDP, USD, billion,

173 38 302 459 224 44 138 77 779 192 406
current, 2019f (2)
Real GDP growth

2.55 1.98 5.52 3.46 3.40 2.20 0.59 0.04 0.17 1.97 1.56
(2018-2019), % (2)
Real GDP growth,

2019-2023 pa 2.19 3.77 8.56 -9.46 4.55 5.27 3.07 3.24 2.59 3.43 3.27
forecast (2)
GDP/capita (PPP), USD,

3,980 25,273 3,047 5,506 5,738 4,387 29,267 17,791 22,865 69,688 37,750
2019f (2)
Net lending/borrowing,
-8.07 -8.04 -7.62 -4.36 -2.36 -3.40 6.66 -6.68 -6.11 7.01 -1.61
% (2)
Volume of imports
of goods & services, -0.61 -0.53 3.33 -14.32 - 3.56 2.21 0.80 2.53 1.17 1.80
% (2)
Volume of exports of
goods & services, % of 12.47 0.38 10.63 -36.99 - 5.58 -1.71 1.71 -4.54 -1.23 3.07
GDP (2)
Account balance, USD,

-21.70 -1.66 -9.30 -12.27 -7.79 -3.10 11.31 -5.50 34.22 11.52 36.59
billion, current (2)
Unemployment rate, %
12.47 3.95 8.61 16.78 - - 1.32 - - - -
of total labor force (2)
Construction output,
- - 10.80 - - - - 11.50 5.50 14.50 6.00
2019f, % (3)
Construction market
CAGR 2019-2024 - - - - - - 6.80 6.00 6.00 9.60 5.50
(%) (4)
1. World Bank 2. IMF 3. BMI research/Mace 4. Mordor intelligence
Source: World Bank, IMF, Mace Group/BMI research, Mordor Intelligence
35
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02
ARTICLES
IN BRIEF
38 44 62 70
Planning for asset Airport facilities and Future office trends The application of
retirement commercial and commercial blockchain in the
benchmarking office tower cost U.A.E. construction
model industry
37
PLANNING
FOR ASSET
RETIREMENT
The announcement of special residency visas by the U.A.E. Cabinet in 2018 for expatriate retirees
wishing to remain in the country after working age created a discussion and debate around how much
money one needs to retire and live comfortably in the Emirates past working age.
Perhaps more importantly, this debate has brought cost planning and saving into the limelight, as
people consider how best to save for retirement.
This mindset is not too dissimilar equipment or fabric elements the money required to retire on a
to the one that should be adopted require replacement to ensure the personal level will be individually
within the discipline of asset continued provision of services. subjective, the date of asset
management, with obvious Usually contributions are made replacement and money required
parallels to be drawn between annually according to a sinking to replace that asset should be
saving for personal retirement and fund budget. less so. Within the discipline of
saving for asset replacement. asset management, the cost
These contributions are often part of replacement when assets
In the case of personal retirement, of a service, estate or community reach the end of their lifecycle
a date is identified and funds are charge relating to assets within is a relatively fixed date based
saved or invested to allow that date that community and both owners on manufacturer’s guidelines,
to become the effective date of and occupiers will contribute to recognised performance criteria,
retirement, whereby the individual the fund. Funds should always local operating conditions and the
enjoys the income or capital to be used to replace assets as and level of maintenance applied over
allow them to give up work. The when such replacements fall due, the course of the asset’s operation.
vehicle used to achieve this is and not used to upgrade, renovate The cost of replacement at that
usually some kind of pension fund, or facilitate improvements that point will be estimated based on
where regular contributions are would otherwise require capital factors including how far in the
made and the money held earns a investment. future the asset replacement date
tax efficient return over the course is and the forecast applicable
of the fund. Equating sinking funds to pension inflation rate each year up to that
funds for buildings brings some point in time.
This is where the more prevalent clarity in observing the importance
mindset of saving for personal of saving for asset replacements
retirement can be adopted to and the importance of the way
explain the principle of one of the in which these savings are made
most effective tools used within for both owner and occupiers.
property and asset management: The crucial difference being that
the sinking fund. if an individual does not achieve
the required savings to allow
Sinking funds are used within retirement, they may need to
property and asset management work a little longer, whereas built
by owners or property managers to assets may not have this flexibility.
set aside money for when building While the date of retirement and
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Risk mitigation
The risks of not having sufficient Should equipment essential for Regular contributions to the
funds in place at the end of a the intended uninterrupted use fund not only help to ease the
built asset’s life expectancy are of the building fail, the direct commercial impact of the cost of
significant. From an operational costs of repairing this equipment asset replacements when they
perspective, delays in replacing will be accompanied by the less fall due but allow for the more
assets at the point of failure tangible but still significant costs equitable recovery of these costs
could have an impact on building such as reputational damage, during the course the asset’s life
function and occupation loss of occupier confidence cycle. The greater the number
depending on the criticality of the and in extreme cases potential of stakeholders, the greater the
assets being replaced. claims for negligence. Examples importance of obtaining regular
of high-profile asset failures in contributions. This is particularly
The operation of assets beyond the region are not hard to find. important in multi-let office or
their expected life cycle, Each year in the UAE the onset of residential buildings, which in
successfully or not, is widely seen summer sees numerous reports the UAE can involve hundreds of
in the Middle East. Although not of building occupiers suffering individuals paying into a single
uncommon in any part of the from air conditioning failures as estate service charge to allow for
world the reasons for doing so equipment that has either not a building’s services to function.
differ from one location to another. been maintained properly or has
Emerging and developing markets simply reached the end of its By including a sinking fund
are more likely to experience this design life begins to fail. From a contribution within the service
due to a lack of planning or relative cost perspective, raising funds to charge, funds are raised for asset
inexperience in understanding pay for asset replacements as and replacements over a period of
the balance between obtaining when they fall due could involve time rather than at the point of
maximum value from an asset additional capital contributions need. This not only mitigates the
against mitigating the risk from owners, particularly if multiple risk of unrecoverable expenditure,
associated with its failure. occupiers are liable for such costs but also ensures that all the
and payment recoverability occupiers and owners that have
becomes an issue. benefitted from the use of the
asset in question have contributed
an equitable amount to its
eventual replacement.
SINKING FUNDS:
A building block in effective Operational
asset management Life cycle DESIGN
design
cost analysis
review
Asset management practice
applies to the entire life cycle of a
development and as part of effective
asset management practice sinking Asset Warranty
HANDOVER
funds provide a useful tool during register library
the management/operational phase.
Recognising the integrated approach
to asset management, we see life
cycle cost analysis in the design Planned
stage and accurate asset register preventative Sinking
MANAGEMENT
maintenance fund
compilation at handover as critical
schedule
contributors to an effective
sinking fund.
39
Commercial sense
The commercial impact of not operating a sinking As a property market matures, the normalisation of
fund is effectively having to ‘find’ large amounts of sinking funds within asset management practice so
money for immediate use on asset replacements that they become expected, rather than nascent,
as and when they fall due. Even if life cycle cost helps underpin both transactional confidence
analysis is used to determine asset replacement and market value away from pure ‘supply and
dates and inform a planned preventative demand’ economics. Quality of supply, to which
maintenance schedule, the requirement for funds asset management plays a fundamental part, has
will be an issue that any property owner needs to become a focus where the current stock includes
carefully manage. A typical life cycle cost analysis many recent developments and built assets less
profile will include spikes in projected expenditure than 10 years old. It is in these markets, particularly
in years when asset replacements are due. These in the United Arab Emirates where development
spikes can be replaced with a more consistent line has been significant in the last 10-15 years, where
of sinking fund contributions year-on-year that the first cycle of significant asset replacements
remove the need for significant, irregular fund- is approaching and building maintenance is as
raising (much like a pension fund). Depending on the important as it has ever been. An effective plan
quality of the life cycle cost analysis, the adequacy for these replacements will help to maintain the
of the sinking fund will be tested when funds are commercial value of property, both in terms of
due, but should always alleviate the burden of capital value, rental value and ability to lease.
unforeseen capital expenditure.
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AECOM
Legislative drivers
It comes as no surprise that the operation RICS has a number of overarching principles that
of a sinking fund when managing property is help to create market confidence through the
considered as best practice and critical to operation of best practice and transparency in
effective asset management. The U.A.E. already service charge administration.
recognises this in Dubai, with the Real Estate
Regulatory Authority (RERA) requiring Owner The mindset of retirement planning for the
Associations (and therefore their appointed individual now needs to be applied to the built
agents) to show sinking fund contributions in environment in the U.A.E. at the federal level for
service charge budgets with the contributions both a commercial and operational perspective.
based on a study of the assets the fund intends The wide-adoption of sinking funds through either
to cover under RERA Direction for Association commercial awareness or legislative requirement
Constitution (Part 8). Internationally, the Royal will help to underpin confidence property markets
Institution of Chartered Surveyors (RICS) outlines that are currently experiencing several challenges.
guidance on the operation of sinking funds and Within the wider region, this aspect of asset
recommends the operation of such funds as part management will come into focus as the property
of good estate management practice within their market matures.
information paper Sinking Funds, Reserve Funds
and Depreciation Charges (2nd Edition) and their
Service Charge Code of Practice (4th Edition).
KEY BENEFITS OF SINKING FUNDS

The main benefits of operating a sinking fund and thereby planning for asset
replacements as part of an effective asset management strategy are:
1 Mitigate risk of unforeseen capital expenditure
2 Increase recovery of funds to pay for asset replacement
3 Reduce delays in asset replacement
4 Reduce disruption to property occupiers
5 Maintain confidence in property
6 Underpins property value
41
THE PROCESS OF A
SINKING FUND CALCULATION
Usually conducted in coordination with life cycle cost analysis, which will provide asset
replacement dates and forecast cost of asset replacements, a sinking fund calculation
will involve examination of asset data and consideration of economic indicators to
establish an annual contribution that needs to be made to a sinking fund to allow for
funds to be available at the time of asset replacement in future.
1
Forecast annual
inflation rate
Identify number
2 of years until
replacement date
3
Estimate cost
of replacement
4
Forecast annual
interest rate
Establish gross
annual contribution 5
to sinking fund
Account for interest

6 earned of funds
held year on year
Establish net
annual contribution 7
to sinking fund
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AECOM
It comes as no surprise that the

operation of a sinking fund when
managing property is considered as
best practice and a critical to effective
asset management. The U.A.E. already
recognises this in Dubai, with the Real
Estate Regulatory Authority (RERA)
requiring Owner Associations (and
therefore their appointed agents) to
show sinking fund contributions in
service charge budgets.
As a property market matures, the

normalisation of sinking funds within
asset management practice so that they
become expected, rather than nascent,
helps underpin both transactional
confidence and market value.
43
CURRENT SITUATION
IN THE MIDDLE EAST
Across the Middle East new aviation hubs are

being developed and existing facilities upgraded
to meet a projected increase in global and
regional passenger numbers. Further, airport
operators are seeking to establish their hubs
as the preferred facility for passengers to travel
through by enhancing connectivity and the
passenger experience.
DEVELOPMENT
CONSIDERATIONS
The design and construction of new airport

facilities must consider anticipated passenger
growth forecasts and the enhanced level of
service that passengers increasingly expect.
The ability to future-proof the design to
accommodate technology advancements
must also be a key consideration.
IMPORTANCE OF COST ANALYSIS

AND BENCHMARKING
Clients are increasingly understanding the

importance of benchmarking their development
programme and aspirations with competing
developments to ascertain capital cost
expectations at differing levels of detail.
Cost analysis of comparable aviation data is
increasingly seen as essential in driving value
and identifying key cost drivers inherent in the
design of airports.
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45
AIRPORT FACILITIES
Airports globally Global airport passenger traffic experienced 12% growth in seat
are facing unprecedented is expected to double by 2035, capacity in 2018 alone.
demand and growth. according to the recent report
Coupled with passengers’ titled Airport of the Future, from The U.A.E. growth has however
increased ‘level of service’ the International Air Transport been relatively flat in comparison
expectations and demands, Association (IATA). With the to the Middle East as a whole,
this means that terminal report also noting that 45 of with some in the market
building designs need to the world’s 100 busiest airports predicting that it will flatten
catch up or face becoming already have capacity issues, further proceeding into 2020.
obsolete. Ashley Morgan, there are major changes and
Associate Director, Aviation development required. IATA however, has suggested
at AECOM, explores the key passenger traffic in the Middle
issues to consider when While the Middle East East may grow by 5% per year
increasing airport capacity experienced its slowest airline when considering the 2019 to
and the importance of cost passenger seat growth for over 2024 outlook.
analysis and benchmarking. a decade in 2018, it still grew
above the global average. While So, is the pressure on?
international capacity, which is
estimated to account for 84% of Globally the top five busiest
the 2018 total capacity, is said airports saw passenger volumes
to have grown by only 2.8%, the in excess of 83 million, with a
capacity is estimated to have 7% increase in passengers and
achieved a much larger 9.4% 7% increase in cargo in 2017
growth in 2018. Whilst below alone. Airports around the world
that of 2017, this does confirm have therefore had to look
the trend that Middle East air at developing robust capital
travel continues to grow, thereby investment plans to cater for
placing continued pressure increasing demands.
on the Middle East’s aviation
infrastructure and To understand the challenges
terminal capacities. that airport operators face, we
also need to understand what
This Middle East regional capacity means for an operator.
growth has coincided with the While a growing number of
transformation of Saudi Arabia’s passengers may meet an
Saudia Airline in a newly- operator’s target, the number
liberalised marketplace. It has of passengers that can pass
accelerated international growth through a terminal is dictated
at the parent, full service, brand not only by available space,
and has been using its new but also by the importance of
low-cost carrier (LCC) subsidiary maintaining health and safety and
‘flyadeal’ to accelerate growth in meeting strict security protocols,
the domestic market, with LCCs along with baggage handling
in the Middle East said to have efficiency, passport immigration
and welfare facilities.
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AECOM
Terminal and runway capacity are

directly related. However, a vast
terminal with the ability to hold
large numbers of passengers
will not be financially viable if
the carriers cannot support it.
A terminal’s relationship with
its apron in terms of distances
between aircraft and their stands
and bridges will dictate the
speed at which carriers can
seat passengers and depart.
This directly correlates with
passenger levels of experience
and satisfaction. An airport’s
runways and taxiways
infrastructure account for a
substantial portion of its capital
expenditure, but more importantly
are typically its most significant
capacity constraint.
47
CURRENT SITUATION Aviation fleet mix Low-cost carriers (LCC)

IN THE MIDDLE EAST The aspirations around routes The increasing popularity
With Abu Dhabi’s Midfield and ease of travel for passengers of budget airlines globally is
Terminal Complex nearing continue to influence the type of contributing to the growth in
completion, and the planned aircraft deployed by airlines and global passenger numbers.
Al Maktoum International will have subsequent impacts on Within the GCC the likes of Dubai,
Airport expansion in Dubai the facilities needed in new and Sharjah and Jeddah airports have
under development, aviation existing airport developments. aligned to this trend and
competition remains strong This could be in relation to the increased their LCC offering
in the U.A.E. specification of runways, contact through Air Arabia, FlyDubai and
stand types and numbers and flyadeal respectively.
The U.A.E.’s neighbour, Saudi passenger boarding bridge
Arabia, has aviation expansion numbers — all of which are assets It is a model that attracts
firmly in its sights as it seeks that can and will impact capital passengers due to the low-ticket
to stimulate and diversify its and operational costs prices and variety of routes that
economy and transform the and therefore need to be are often offered to and from
Kingdom into a tourist destination carefully considered. regional airports and allows the
and global hub connecting Asia, operators to achieve maximum
Europe and Africa. Fleet mix selection can not only throughput from minimal
change the trends in passenger operating costs.
Elsewhere in the Middle East, travel but also provide additional
Kuwait International Airport revenue for airlines through more Airlines often drive decisions for
opened Terminal 4 in December expensive tickets and reduced airport owners and operators as
2018 providing for an additional landing charges if no stopover they determine passenger profile
4.5 million passengers per annum is required. and expectations of the level
(MPPA) capacity to expand of passenger service. As such,
their operation to 25 MPPA by The Airbus versus Dreamliner operators are required
2022. Earlier in 2018, the new debate has taken centre stage in to streamline the passenger
passenger terminal at Muscat recent years when airlines have journey through automation and
International Airport opened, been reviewing their fleet mix, smart technology.
providing the Sultanate the particularly within the Middle East
capacity to handle 20 MPPA, with where Airbus has its strongest The budget airline operating
plans in the pipeline to increase customer base. However, this model has contributed to smart
capacity further to 48 MPPA. potential headache for airlines initiatives being implemented
Bahrain is additionally set to begin and airport operators alike was across terminals globally such as:
the soft opening of their new effectively ended in February remote check-in; passenger bag-
passenger terminal in Q4 2019, 2019, when Airbus officially drop bays; automated gates to
boosting their capacity announced it would be ending security and in passport control/
by 14 MPPA. production of the Super Jumbo immigration; and increasing
A380 by 2021, a decision which departure security bays.
looks set to change the fleet
mix of some Middle East airline All these initiatives improve
operators over the next decade. throughput, while maintaining
a safe, secure and pleasant
experience, and have an impact
on construction designs and
capital costs.
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AECOM
Smart technology
To meet ever-increasing Within the Middle East, Dubai Whilst domestic passenger
passenger demands, level continues to showcase its growth in certain parts of the
of service aspirations and appetite for innovation and smart region may presently be said
increased regulations, airport technology, with the annual to be flattening, aviation within
operators are embracing smart Dubai Airport Show showcasing the Middle East appears to
technology more than ever the considerable breadth of have a positive outlook as we
and are continually developing new and available technologies; enter the coming decade. The
and trialling new technologies from autonomous vehicles, ever-improving technological
to improve travel time for autonomous baggage handling advancements, increased
passengers, from the minute they solutions, artificial intelligence, passenger level of service
set off from their home until they 3D security screening to smart demands and the evident strong
leave the runway. The process passenger apps, all designed to competition between Middle East
of moving passengers through increase passenger experience aviation developments provides
an airport needs to be secure, and reduce travel times, whilst for an interesting landscape for
seamless and quick, while still increasing the operator’s ability the future of Middle East aviation.
offering a positive experience. to remain flexible in the pursuit
of meeting their customers’ ever
changing demands.
49
DEVELOPMENT
CONSIDERATIONS
The design and Meeting passenger delays and cancellations to their
construction of new flights. Commercial initiatives
experience demands aim to bring in this technology,
airport facilities will need
and operator aspirations including enabling passengers
to consider anticipated
to be notified on devices of
customer growth forecasts Focus will be on meeting
buying opportunities.
and the increased level passenger demands and
of service expectations, operating capacity whilst
Related to this is the challenge for
whilst taking into account providing the best level of
designers to provide the space
technology advancements passenger experience at every
and efficiencies for fast security
and improved speed of stage of the journey. There is a
clearance for passengers when
move to make the journey more
passenger throughput, enhanced security requirements
efficient, with smart technology
with suitable designs giving direction and information
are in operation.
ultimately impacting to passengers as they move
terminal facility sizes. through the airport process, or
even ahead of this in the case of
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AECOM
The aviation body IATA’s Level Pre-built modular monitoring The implementation of
of Service concept sets out and screening rooms that biometrics, self-service and
the requirements of airport can be easily moved to suit automation has the potential
facilities, namely passenger demands can offer flexibility to directly impact the physical
terminal buildings and how over space usage and layout. design of terminal facilities and
airport operators can achieve Automated tray-return systems, their overall size, due to the
these increased level of service auto diverters and parallel spot potential ability to reduce the
offerings within their own checks also enhance efficiency footprint of key areas within
developments. With increased and speed up the process for the terminal facilities for
competition globally, operators passengers. This additionally example within check in areas,
are increasingly aspiring to be means that remote inspections due to the space saving nature
best in class, which ultimately and more efficient searches can of these technologies.
drives design decisions for new be carried out away from security
and upgrading of existing assets. scanning areas to reduce waiting Further advocating the use of
times and delays, which can technology and smart airports
Electrification and further reduce overall terminal is IATA. Their Global Airport &
space requirements. Passenger Symposium (GAPS)
autonomous vehicles 2019 held in Warsaw, Poland,
and processes Smart technology for explored the impact of existing
processes in the passenger
Many airport operators are the smart airport journey and debated how future
thinking ahead to the day when needs, trends and solutions will
most airside vehicles and With the ever increasing up take
of smart technologies and the shape the way we travel.
equipment will be electrically
powered. Monitoring of every push towards becoming a smart
airport, airport operators and The discussions focused on:
vehicle on the airfield through
GPS is already commonplace airlines alike are pushing forward
with the implementation of – Seamless journey: biometric
and will be used increasingly. technology
new and innovative technology
New initiatives such as intelligent solutions to assist in streamlining – Transforming airports: off-
autonomous vehicle technology and speeding up the passenger site processes, deployment
will replace the need for fixed processing journey, as well as of artificial intelligence and
conveyors and sorting systems. the real time management of the robotics
For example, enabling automated airport and its operations. – World of interactive data:
‘pods’ to move between fixed The real-time exchange of
drop-off points to collect and Key technology trends of 2019: operational data.
offload baggage would mean
that they can determine their – Biometrics
With the introduction and
own optimal route through an – Self-service and automation application of increased smart
airport. This provides the airport – Artificial intelligence and technologies the key for airport
with a flexible system, operational predictive software operators will be to deliver
certainty, and a reduced improved passenger (and
– Blockchain
footprint of conveyor systems employee) experiences, whilst
that reportedly use 50 per cent – Improved cyber security
ensuring security is maintained
less energy; thereby potentially – Onboard connectivity and OpEx costs are ultimately
reducing terminal building areas – Robotic assistants reduced to cover off any
due to the reduced conveyor increased CapEx costs.
need and improved space
efficiencies through better front
of house (FOH) versus back of
house (BOH) ratios.
51
Sustainable design
As well as future-proofing the design of airports
to enable them to harness advancements in
technology, many airports are pledging to maintain
or even reduce their carbon footprint, despite their
expansion plans.
These changes will require careful consideration of

building services design, selection of construction
materials, review of sustainable technologies and
a wider consideration of the transport strategy to
ensure that there is adequate public transport for
passengers to travel to the airport and leave their
cars at home. However, the sustainability-driven
expansion of public transport options poses a
dilemma, as in many cases car parking charges
are a large revenue generator for an airport.
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AECOM
53
CONSTRUCTION CONSIDERATIONS
AND OPPORUNITIES
Airside environment Revenue generation vs. capacity

One of the major construction challenges that most Maximising revenue for airport operators remains a
airports face is how to carry out major works in an priority and while increasing terminal space may offer
airside environment, where safety and security are higher income, there is a fine line between the risks
paramount. Often airports are constrained in the of overcapacity and the need to offer flexibility at
areas and access they can offer for a construction peak periods. There is inevitably a trade-off between
compound. Where there is sufficient space to the two, for example, a 5 per cent to 10 per cent
construct a logistics ‘hub’ to support a programme decrease in scheduled flights may be effective in
of works, this often poses challenges around reducing capacity, while also allowing an airport to
management, security and cost. In any case, there is recover from periods of construction disruption
a need to ensure that construction equipment and
materials do not contaminate or interfere with key Airport terminals are designed to respond to the
airport systems or pose a risk to aircraft, or needs of both passengers and carriers and having
ultimately passenger safety. the right balance will also drive revenue opportunities.
Competition for resources Operators maximise retail offers by ‘snaking’ the

passenger journey and providing open frontage
Another significant consideration, in the context to retail outlets, so that they are more available
of major infrastructure projects, is the availability and inviting. Investment plans need to take these
and capability of resources to deliver large-scale requirements into account when designing terminals
airport projects that will be needed to meet capacity for both short- term demands and future-proofing.
growth. Although not a challenge solely for the
aviation sector, airport clients will compete for talent Another set of factors to consider in this balance are
in both for their own organisations and within the the environmental targets of many airports, which
construction firms delivering work, potentially driving could mean additional capital expenditure and fall in
up prices with the demand. ongoing revenue generation because of reduced car
parking at the airport.
Modular construction
Modular construction techniques are being
increasingly explored in the construction of
airport buildings to achieve consistency, speed of
construction and a high level of quality. However,
it is not yet known if this will be a viable option for
a complex terminal or pier. For example, when
considering access and space challenges, there
is a need to manage the storage and on-site
installation effectively.
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DEVELOPMENT COST CONSIDERATIONS
1 Technology
New technology comes at a cost (installation, staff
training and maintenance).
2 Resourcing
Resource availability/competing developments/
procurement and supply chain demands.
Requirement for clear client briefs and objectives,

identification of key project drivers.
Managing expectation of construction CapEx
3 Design
to budget
costs, whilst challenging designs throughout the
design process ensuring expectations are aligned.
Identifying clear construction methodologies,
ensuring phasing and interfacing requirements are
clearly considered.
Managing expectation of project programme,

ensuring sufficient time is allocated to front-end
approvals and testing, commissioning and ORAT
periods at the end of the construction period.
4 Planning Historically aviation projects over run due to their
level of complexity and so early engagement
by all airport and government stakeholders is
imperative — early identification and agreement
of critical path.
The management of the works on site can add

significant costs to a project through the need for
screening of materials and construction personnel
and movement between landside and airside
5 Site
management
environments.
Phasing construction works to keep an airport
operational can also lead to additional cost in
contractors’ preliminaries and introduce risk of
interfaces between projects.
55
King Khalid International Airport, Riyadh, KSA

Image courtesy of GACA
56
AECOM
BENCHMARKING
Clients are increasingly understanding the importance of benchmarking their
development programme and aspirations with competing developments to
ascertain capital cost expectations at differing levels of detail. Cost analysis of
comparable aviation data is increasingly seen as essential in driving value and
identifying key cost drivers inherent in the design.
IMPORTANCE OF Through this cost analysis; which RICS

defines as:
COST ANALYSIS AND
BENCHMARKING ‘… a full appraisal of costs involved in
previously-constructed buildings …
Airport operators and developers are
aimed at providing reliable information
increasingly turning to cost consultants
which will assist in accurately
to develop budgets and cost plans
estimating [the] cost of future buildings.
reflective of their concept designs
It provides a product-based cost model,
and aspirations, to determine early
providing data on which initial elemental
concept budgets for their proposed
estimates and elemental cost plans can
developments, as part of their quest for
be based.’ (NRM, 2009 p10)
project funding.
Based on detailed cost analysis,
Through effective cost analysis
the undertaking of aviation project
and subsequent benchmarking of
benchmarking can be conducted
historic cost data the ability to derive
in varying degrees of detail; project
meaningful analysis in varying levels of
level, facility level, elemental level and
detail is key to providing clients with an
component level, as shown below.
early indication of their expected capital
expenditure to meet their proposed
development aspirations, as well as
throughout the cost plan evolution.
Project level
LESS
LEVEL 1 Project A $m2 Project B $m2 Project C $m2
Facility level
LEVEL 2 Terminal stand baggage taxiway MSCP hangar
Elemental level
LEVEL 3 Substructure superstructure envelope services interiors
FF&E external services preliminaries
Component level
MORE
LEVEL 4 Sheet piling excavation disposal concrete foundations
Formwork steel lighting walls & floors internal partitions
57
The level of information available for analysis and the

stage at which the benchmarking is undertaken will drive
the level of detail of the benchmark analysis. For feasibility
and project funding objectives this often involves a Level
1 analysis at purely a project level a cost/m2 for the
entire development based on some high-level design
parameters, to derive an initial capital cost target.
Project and facility level benchmarking

When looking at project and facility level benchmarking to
derive early budgetary advice for proposed developments
there are several aspects that need to be considered.
Generic items for consideration:
– External design — iconic vs. functionality

– Interior design — e.g. achieving large, column-free
spans to give open and bright spaces
– Interior finish quality and specification — product
selection
– Internationally-procured equipment and materials
(supply/demand issues, long lead times)
– BOH vs FOH — building functionality and efficiency
– Identifying key cost drivers early; time/cost/quality
– Technology — building for today vs. safeguarding
for the future
– Passenger experience and the airport’s chosen level
of service (LoS) (IATA)
– Procurement strategy
– Capacity — future expansion safeguarding.
By identifying the above considerations and reviewing

the clients’ requirements against these, the data set
becomes more suitable for analysis and any necessary
normalisation, ensuring that the identified project is
reviewed against projects of a similar specification
and aspiration.
The table opposite identifies cost ranges and subsequent

benchmarks for terminal facilities based upon MPPA
categories, priced in USD and subsequently aligned
with Middle East construction markets and applicable
location indices.
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AECOM
USD/m2
Terminal categories based on MPPA
Low High Rate
(USD/m2) (USD/m2) (USD/m2)
Airport terminal - 20 MPPA and below 2.700 6.000 4.350
Airport terminal - 20 to 30 MPPA 3.300 6.500 4.900
Airport terminal - 30 to 60 MPPA 3.500 6.800 5.150
Airport terminal - 60 MPPA and above 3.900 6.300 5.100
When utilising benchmark data, Undertaking elemental further level of design verification
such as the above, to produce benchmarking allows for the and validation.
an estimate it is essential to increased potential of drawing
review the clients’ aspirations, more meaningful benchmark The average cost for each
proposed design and multiple conclusions in relation to the key element can then be
other aspects as identified in proportional split of the key benchmarked for terminal
the items for consideration elements of the facility. facilities which can then able to
above to determine where in be expressed as a percentage
the above ranges the proposed An example of such of the facility’s cost/m2 as
development will be expected to benchmarking analysis would be illustrated below.
fall and should aim to be. in relation to terminal facilities
whereby the following elemental
The use of benchmarks can categories can be identified:
be misleading when they Proportionate split of facility cost
are not truly understood and – Structure Elemental averages
used incorrectly. It is therefore – Envelope
essential that they are read in
– Interiors
conjunction with any caveats or
exclusions that aim to provide – Services (MEP)/special
context to the data presented, airport systems (SAS)
and these must be carefully – Preliminaries
considered and clearly identified
when presenting findings Through elemental analysis of
to clients to enable them to the terminal facility, it is possible
understand the basis of the to derive an average proportional
costs and benchmarks used elemental cost split from a range
and presented. of similar aviation projects, which
then enables the evaluation of a
Elemental client’s project in a more detailed
benchmarking way throughout the cost plan
MEP/SAS
evolution. It additionally shines
Through increased detailed cost a light on the elemental aspects
Interiors
analysis of aviation facilities of the project and cost plan that
and as the estimate evolves, sit above or below the projected Preliminaries
there is the ability to undertake benchmark ranges — allowing
benchmarking at a deeper the design and commercial Substructure
level, proceeding into Level 3 or teams to focus in on those
elemental benchmarking of a aspects to ascertain the reasons Superstructure
given facility. for these differences, giving a
Envelope
59
Key cost drivers: Terminals Additional parametric analysis

and benchmarking
When analysing the data and reviewing new
projects against these benchmarks it is necessary Through the process of detailed cost analysis and
to understand some of the key cost drivers that are the subsequent benchmarking, the forecasted
related to the above identified elements: capital cost outcomes can be identified. Further
the data can produce additional parametric data
– Structure: Ground conditions, column-free spans analysis such as determining the overall size ranges
to be achieved (structural grid), construction of terminal facilities. Through the benchmarking
methodology, local building regulations. of aviation developments and the identification of
– Envelope: Design complexity, such as iconic key aviation metrics it is possible to determine an
features that require a greater degree of bespoke average or optimal terminal area.
fabrication, less standardisation, more complex
interfaces and connections. Roof and façade This form of analysis can be conducted against key
specification, as well as wall to floor ratios. aviation metrics such as; terminal area per MPPA,
– Interiors: Back-of-house to front-of-house area area per gatehouse/contact stand or area per
ratio, quality of finishes, retail and concessionaire peak hour passenger (PHP), all of which provide an
fit out strategy, FF&E. additional level of analysis against which operators’
development aspirations and designs can be
– MEP/SAS: Regional climate, security requirements,
challenged and effectively estimated and analysed.
stakeholder requirements and shared information
technology specialist systems.
These metrics additionally allow for high level
– Preliminaries: Based on the above elements the feasibility estimates to be generated when a client’s
preliminaries will be driven accordingly. MPPA is their only known parametric, and terminal
size has not yet been considered or decided,
enabling sound assumptions to be made around
required terminal sizes to meet the client’s objectives.
Overall, the importance of capital cost benchmarking

cannot be underestimated throughout all stages of
the project lifecycle, bringing numerous benefits to
clients’ and their development aspirations.
Istanbul New Airport Traffic Control Tower, Istanbul, Turkey
60
AECOM
At AECOM, our ability to be

involved throughout all aspects of
the construction process enables
us to provide a completely
integrated offering whereby
commercial management
including cost analysis and
benchmarking goes hand in hand
with design and engineering —
thus assisting in the development
of commercially-viable designs
and developments, further
ensuring that clients’ aspirations
can be more likely realised.
61
FUTURE OFFICE
TRENDS AND
COMMERCIAL
OFFICE TOWER
COST MODEL
Reports of the office’s demise have been greatly exaggerated. But how we build, occupy and maintain
workplaces must continue to evolve to reflect the changing world of work. In the first part of this
article, AECOM’s workplace strategy and design specialist Nicola Gillen outlines some of the major
forces shaping next-generation workplace design and identifies three dynamic trends defining the
Future Office. In the second part of this article, AECOM’s head of Offices, Corporate Solutions and
Residential end markets in the Middle East, Andrew Thompson, takes a deep dive into a commercial
office tower cost model, identifying some key cost drivers for consideration along the way.
The office is dead. Long live imagined, built and operated. A new age of work
the office. Despite continual Driven by automation and artificial
predictions of its demise, the intelligence (AI), the Fourth
and workplace
office is a space that continues to Industrial Revolution means that
As the world of work changes, so
evolve and endure and remains a some jobs will cease to exist in
too must the approach of those
central part of our working lives. the coming years while others
who design, build and maintain
will be created.
our physical and/or virtual
Throughout history — from
offices. In AECOM’s RIBA book,
medieval scriptoria and Lloyd- With four generations in the
Future Office: Next-generation
Wright’s first skyscrapers to the workplace for the first time, we
workplace design, our workplace
modern Apple-style campuses also need offices that support
experts analyse the practical
and reimagined mixed-use city and adapt to the needs and
impacts of these changes on the
quarters of today — we have talents of all those who work
future of work and workplace.
seen the design and purpose of there, fostering constructive
Here, we identify three of the
offices respond to the leading interaction and collaboration.
most important trends that
economic ideas, technologies
workplace designers, developers,
and commercial enterprises At the same time, more of us
occupiers and users need to
of the time. The speed of that are living in cities than ever
focus on.
evolution is only intensifying. before — attracted by
employment and other
Work has opportunities, leading to growing
economic, environmental, and
been disrupted social pressures in some urban
areas, such as a lack of
Digital technologies are rapidly
affordable housing.
reshaping what we do and how
our workplaces need to be
62
AECOM
Design to Similarly, ensuring greater energy Unsurprisingly, the shift to more

adapt within efficiency must be a priority for agile working is influencing
next-generation workplaces, not the design of the future office,
a circular economy just to reduce costs but also to where a range of formal and
meet global emissions targets. informal areas for meeting
For generations, the construction As a result, the future of office and collaborative work are
industry has followed a power will be electric, with more interspersed with quieter areas,
‘linear economy’ model with buildings generating their own providing a wide variety of
materials and resources mined, power via built-in solar panels task-specific workspaces and,
manufactured, used and then and using low carbon and energy crucially, providing valued staff
thrown away. With the global efficient solutions such as heat with choice and autonomy.
demand for resources surging, pumps and heat recovery etc.
raw materials becoming harder to Building on this, the increasing
extract and the threats of climate Facilitate data-enabled prevalence of sensors in
change increasing, this status workplace fixtures, fittings and
quo cannot hold. collaboration and
equipment is already helping
customisation: offices to adapt to their users’
The circular economy model needs, for example through
offers an alternative, more Innovation purely for innovation’s learning and responding to
sustainable, ‘regenerative’ sake quickly dates. What matters people’s individual preferences
approach, prioritising the most is ensuring that the for lighting levels and
retention and refurbishment of latest technologies deployed temperature. And, in the future,
buildings over demolition, and in workplaces support users, new technologies could help
designing for the separation and enabling them to work more to make collaboration and
reuse of materials at the end of a efficiently together. individual work even more
building’s life. efficient. Wearables will enable
To that end, with more of us more personalisation of space,
Currently, too many buildings equipped to work on the move, and voice and mood sensors in
are designed with little thought there’s a growing need for flexible office buildings could recognise
for the future, and risk leaving a workplaces designed to bridge the energy of impromptu
legacy of obsolete architecture, the gap between home and more conversations between
composed of complex traditional workspaces. This, in colleagues and ‘bring the meeting
components irretrievably turn, is having a profound effect space to the people’ through a
melded together, that locks on the wider market for office temporary acoustic bubble.
away precious resources. By space, both financially
designing buildings with more and physically.
modular elements that can be
deconstructed, adapted and
reconstructed, we can extend
their life and enable resources to
be salvaged and reused.
63
Remember your More and more organisations (feeling connected and part of a
now recognise that their people community), intellectual (being
people will always are their most expensive and able to use and develop our
matter most: valuable asset. But understanding knowledge and skills to perform
and measuring the impact of well), values (the match between
More and more of our routine workplace environmental factors the organisation’s and the
tasks will be automated in on issues such as employee individual’s values); and material
the future office. But, as the motivation, satisfaction, (experiencing a sense of fairness
leading business commentator productivity and mental health is in terms of the availability,
Geoff Colvin asserts, our very a complex task. quality and quantity of rewards)
human ability to empathise, (see Figure 1).
collaborate and innovate will A workplace purposely designed
remain essential. While the size around wellbeing must reach Designs should address the
of the human workforce may beyond the physical and wide range of factors that
decrease, therefore, the value to environmental aspects of comprise a person’s wellbeing:
organisations of their employees wellbeing, such as noise, light and encouraging them to move
and the highly-skilled work they indoor climate, to include social around the office, including using
do will only grow in importance. and psychological dimensions. the stairs; and providing large
and small spaces for socialising,
In response, we envisage a time For example, AECOM’s holistic relaxing or quiet chats. In
when the office user will become wellbeing assessment at work addition, the spaces need to
the client, with workplace embraces six dimensions of be ergonomic and at a human
design increasingly centred on health: physiological (getting scale, engender a sense of pride
developing a community base through our day-to-day work and belonging, and provide
— virtual or physical — that without undue fatigue or welcoming, comfortable team
supports comfort, creativity, physical stress); psychological areas that express team identity.
productivity and job satisfaction. (support for our mental health
and emotional balance); social
Figure 1
Intellectual Physiological
EEDS TO BE C
GN ON
E IN SI
LB D
EL
ER
+W
ED
Mental and Social

WH
HEALTH
emotional
OLLY
Values Material
64
AECOM
The future is now Commercial office Structure

tower — cost model
This is a pivotal moment for the Structural systems for tall
office — this most familiar of In the second part of this article, buildings are driven by a
spaces is undergoing significant Andrew Thompson, Head of combination of architectural,
and extensive change as we enter Offices, Corporate Solutions & economical and site factors.
the next chapter in its history. Residential End Markets takes Building form and height is clearly
Workplace designers, developers, a closer look at some of the key critical, as are the net-to-gross
occupiers and users need to cost drivers for commercial areas. The nature of the site itself
understand how these changes office towers and concludes will also have an impact.
will impact future workplaces and with a cost model for a typical With land values in major EMEA
their own working lives. commercial office tower in the cities rising, developers are
Middle East region. exploring more challenging sites
It is still early days, but many (infills, tunnels or old industrial
of the offices of the future are The biggest cost drivers for land) that may require a more
being conceived, designed, built towers, and those influenced complex structural solution.
and occupied now. As the digital the most by design, remain the
revolution in workplace continues, structure, facades (and their Structural framing solutions
profoundly affecting the entire interface) and the MEP services. will continue to depend on the
building lifecycle: design, As tower design evolves the building’s intended use. In the
specification and procurement prevailing trends such as residential sector, tall buildings
to construction, fit out, operation increased structural grids, are usually concrete framed
and maintenance, collaboration floor-to-ceiling heights and with flat slabs. This reduces the
is key to ensuring that offices location of cores impact the structural zone and allows floor-
meet the needs of users today, design response. to-floor heights to be minimised,
tomorrow and for generations providing a more economical
to come. design for this sector. In contrast,
commercial tall buildings deploy
either a composite (steel and
concrete), concrete or steel
frame. Steel frames allow longer
spans than traditional reinforced
concrete, giving developers more
flexibility in the use of space and
enabling column-free floor plates
to be provided, however steel
framed buildings still remain less
economical than concrete frame
buildings in the Middle East.
With the increased appetite for

taller buildings and larger floor
plates, braced tubes or bracing
on the perimeter are increasingly
common. How this is incorporated
into the design and its interface
with the facade is a key cost driver.
Exposing structure and making it
an architectural feature can give
the design some edge but can be
more expensive.
65
Increasing floor-to-ceiling height, Cladding cavity and have a driveshaft

without increasing the overall penetrating the cavity,
storey heights can be achieved One of the first studies on a connecting them to the
by reducing the structural and tower scheme is to create a blinds.
services zone within the ceiling. successful facade and define the
However, this, in combination with performance limits. The glazing − External solar shading:
the larger spans, will add weight to ratio of the façade will define the Fixed solar shading on
a steel frame. look of the building making it look the outside of the tower is
transparent, opaque, solid or light. an alternative solution to
Another important design trend It’s important for the team to ask minimize the heat load for
is the preference for offset cores. the question: how do you make
They appeal to developers and MEP services. The overall
the correct architectural decision
architects looking for a greater cladding zone incorporating
but balance the requirements
flexibility, adaptability and for amount of daylight into the the shading is wider but if
efficiency of floor space. building, direct sun exposure, and the perimeter structure or
But they pose a greater challenge reduce energy use. There are a bracing is exposed this can
to structural engineers, as an number of different options: create the zone for solar
offset core generates higher shading. While there are
torsional forces, which could additional costs for the solar
− N
atural ventilated facades:
result in the need for expensive shading elements the base
outrigger systems deployed to Double-skin facades have
been developed to reduce cladding system behind can
resist the torsion.
the heat loads on glass be a simplified and maximise
Sustainability will be a continuing envelopes, with blinds in the on the economies of scale.
and growing influence on cavity. These vary from those
− High performance
structural engineers, driven with wider cavity to allow
by legislation and central double-glazed units:
for maintenance; principally
government targets. A fully glazed solution using
these work well but are
Developers will need to consider unitised double-glazed units
expensive and take up floor
alternative construction remains a possible solution.
space. Slimmer systems
techniques and new material It requires enhanced G and
are available, typically
technologies in response. Modular U values achieved through
systems and off-site fabrication with a cavity of 150mm
high-performance coatings
will become more prevalent. but the cavity still needs
or by increasing the amount
Recycled aggregates and to be maintained through
of solid cladding on the
high-strength materials will also opening vents, which can be
building. A full-height clear
become more frequently used. disruptive to tenants.
glazed solution will give the
− Closed cavity facades: benefit of increased daylight
A system that uses but does place additional
compressed dry air to be requirements on the MEP
pumped into the sealed design due to the additional
cavity between the two heat loads and sustainability
skins, the cavity can only requirements.
be reached by removing
In any solution the buildability
one of the glazing skins. requirements of the facade should
As the blinds in the cavity be considered from the earliest
cannot be accessed once design concept.
manufactured, blind drive
motors are fixed outside the
66
AECOM
Services increased pumping requirements drive to maximise efficiency in

and basement distribution. More space taken by lifts can lead
The specification levels, interfaces pipe gauges are needed and the to a solution with sky lobbies
and distribution are important cost of fittings, valves and so on, and transfer floors to manage
considerations for the services is higher. Hot water services need user flows.
design. The services strategy to be treated locally, and often
should be carefully considered at hydraulic breaks are required. Procurement
the outset, as changes later on Developers may also need to
evaluate whether PRVs or heat
and construction
are difficult to incorporate.
exchangers are more economic. challenges
Off-set cores are a major enabler
The construction of towers brings
of innovation in services design, Electrical installation
allowing options for where plant a different set of challenges
is located. Individual on-floor compared to a lower rise building.
Decisions taken around
plant solutions house principal air Towers are specialised major
plantroom location will be critical
handling kit at each level — the projects and there are really only
here. Generally, HV distribution
loss of space on these floors a few contractors who have the
systems are the same as in other
needs to be balanced with the skilled staff and expertise to
commercial offices. But levels of
advantage gained from freeing up deliver them successfully. The
standby generation need to be
wider areas at either the midpoint more towers under construction
fully explored. For commercial
or at the top of the building. in a city, the busier the main
office towers, 100 per cent
contractors will be. Simple
standby generation is often
Towers developed in financial demand and supply will result in
provided; the location is a balance
districts have retained the higher pricing levels.
between the use of roof space,
traditional MEP design allowances which is increasingly valuable for
to meet the requirements of When assessing the risk of
other uses, and location within the
tenants with higher cooling delivering a tower, investors and
basement and building with the
loads, resilience in services and developers need to include how
acoustic and flue requirements
future flexibility. it is viewed by the market. They
taking up net floor area.
need good, well-coordinated
Exposed services are becoming information to sell the schemes
Lifts positively to the market.
popular with tenants, particularly
those in the technology or Careful analysis of traffic is
media sectors. This is mainly an The chosen procurement
required to ensure lift design is route needs to reflect all of this.
aesthetic decision and depending fit for purpose. That said towers
on the layout and specification Two-stage design and build
lead the innovations and features or construction management
can in fact cost more than a such as destination hall controls,
conventional approach. contracts are generally more
first seen in high-rise buildings, popular in Europe than single-
are now common in all. However, stage agreements which in
The unique nature of towers lift costs for towers are often two
brings with it some challenges for turn are more common in the
to three times that of standard Middle East.
service design. Logistics need to building cost.
be carefully thought out, and the
services programme needs to Contractors still favour lump-sum
Designers will need to strike deals, but the correct sharing of
reflect the time it takes to move a balance — performance
people and materials around. risks between contractor and
vs. occupational density developer is essential in the
Due to the height of tall buildings, requirements, ease of use and
the question of hydraulics and current market.
the space taken up by lifts and
pipe pressures are critical in service core in the overall design.
design terms. Towers need a To deliver maximum value to
The combination of increased the tall building client it can be
greater number of pipe risers, with occupational densities and the beneficial to engage with trades
67
and the main contractor’s advice repetition, standardisation and This makes procurement and
can be sought and inputted into economies of scale designed in. performance risky.
the design process at an early Modular construction is already
stage. This allows the contractor’s viable in most regions and is even The tall building principal
expertise to be designed in, and the preferred form of building contractor will be nervous about
waste and inefficiencies to be in some market sectors, but having such a strong dependence
designed out early, when most generally remains uncommon on a single source determining
value can be created. in MENA. The key benefits to the success or failure of their
using modular construction for high-profile tall building project.
Construction a tall building include: speed of
erection, commissioning and Utilities
Continuous innovation is handover; quality, as the product
important to stay ahead in is built in a controlled environment The requirements and size
construction — and tall buildings yielding higher productivity and of incoming supplies for a new
are seen as the test bed of quality; safety, as less time is commercial tower need planning
the construction industry, with needed on site and working and implementing at an early
innovations trickling down to at height; sustainability, due to stage of its development and
regular construction projects better thermal and acoustic it is advisable to engage with
once proven on tall buildings. performance along with reduced the statutory utilities at the
waste; innovation, in the form earliest opportunity.
The current swathe of innovations of increased prototyping, and
are across many specialist factory testing of new technology Of particular importance is
trades, but all are aimed at effectively de-risks the on-site early engagement with local
reducing the critical path of the use of the new tech. power networks, the incumbent
construction period including: electrical distribution network
high strength concrete allowing These are all very desirable operator. Electrical connections
slimmer columns, beams and benefits when building a tall in cities have to be planned well in
slabs, quicker curing and striking, building, but there are key advance as it is common for the
hence quicker frame cycle times; construction challenges to point of connection for a power
high-strength steel allowing be overcome: planning the supply to be a fair distance away
slimmer double or triple-storey logistics route of modular units from the point of use. To install
members and quicker erecting; from factory to site, adhering to cabling through the streets of
advancements in jump lifts articulated lorry standard sizes busy cities requires planning
enabling the early use of lifts in lieu and avoiding low bridges; tower in advance and can be very
of hoists within weather-protected crane selection will need upsizing expensive to deliver.
lift shafts by building temporary in both load and reach capacity;
crash decks and lift motor site layout needs to allow clear Due to their size some typical
rooms; advancements in unitised material handling areas to lift the commercial office tower
cladding installation methods, modules directly off the back of developments can be connected
speeding up the weatherproofing the vehicles, necessitating the in excess of 30,000 volts. This
of the tower. use of just-in-time deliveries and has an effect on the overall
an out-of-town consolidation connection arrangement and cost
Modularisation, or off-site centre to ensure exact timing of with the transformer provisions
manufacture and assembly, is a each module delivery, minimising are much larger within the
very exciting area of construction congestion of city centre roads buildings itself and the capital cost
innovation, potentially offering around the tall building and is significantly higher also.
real productivity benefits to maximising hook-time efficiency.
the tall building, if the current There is also the risk that the
glass ceiling of 30 storeys can modular industry is small and
be broken. The well designed predominantly based in central
tall building form tends to be Europe and Asia with very limited
inherently modular with simplicity, supply in EMEA.
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AECOM
Cost model
There is a wide range of cost for The following cost model The model reflects a summarised
commercial office towers, when summarises the shell core cost elemental cost breakdown
measured on a AED/m2 basis over of a notional premium grade high- obtained from a competitive
the gross floor area. Shell and rise office tower in a major city tender through a traditional single
core prices can range greatly. in the Middle East. It has a gross stage fixed-price, lump-sum
This range is primarily influenced floor area of 100,000m2 over arrangement. The cost model
by the architectural response 50 floors above ground and five includes for all main contractor
to a site and its interface with basement levels. It has an overall preliminaries and risk allowance
the required structural solution, net-to-gross ratio of 70 per cent to complete the building to a shell
followed by overall specification and a wall-to-floor ratio of 0.50. and core status with front-of-
levels and then height. house (FoH) and back-of-house
(BoH) areas finished to a high
standard. Demolition, enabling
works, external works, external
services, category A fit out, tenant
enhancements, professional fees
and VAT are all excluded.
Table 1: Commercial tower cost model
Percent of
Element USD USD$/m2
total cost
Substructure (incl. basement etc.) 27,500,000 275 10%
Superstructure (frame etc.) 55,000,000 550 20%
Building external envelope (façade etc.) 44,000,000 440 16%
Internal walls and doors 5,500,000 55 2%
Internal finishes (to FoH & common areas) 33,000,000 330 12%
Fixed fittings, furniture and equipment 550,000 6 0.2%
Sanitary fittings 825,000 8 0.3%
Mechanical services 35,750,000 368 13%
Electrical services 31,625,000 316 11.5%
Conveying systems (VT etc.) 13,750,000 136 5%
Main contractors preliminaries 27,500,000 275 10%
Total (USD) 275,000,000 2,750 100%
69
THE APPLICATION
OF BLOCKCHAIN
IN THE U.A.E.
CONSTRUCTION
INDUSTRY
The adoption of blockchain technology solutions A recent report from the world’s largest research store,
in the U.A.E. is being promoted by a government Research and Markets, indicates that construction
that is focused on becoming a global leader in the U.A.E. will grow significantly over the next five
of innovation. With the launch of the Dubai years. This raises several questions as to what extent
Blockchain Strategy, in collaboration with the blockchain can be utilised to support this growth.
Smart Dubai Office and Dubai Future Foundation, The report, titled ‘Construction in the U.A.E. – Key
Dubai has not only recognised the advantages Trends and Opportunities to 2023,’ states that new
of the technology but identified the potential for investment is expected in all major sectors and quotes
AED 5.5 billion of annual savings in document several government initiatives already in place to
processing costs. underpin a promising outlook up to, during and beyond
Expo 2020. There is no doubt the construction
industry is already looking at blockchain, but with
few examples worldwide, let alone in the Middle
East to draw experience from it would appear this
conversation is only just beginning.
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AECOM
With the scene set for embracing While this does not replace the Globally, even in the most
new technology that promotes levels of certification needed technologically-advanced
efficiency while saving companies during construction, it would assist nations, blockchain-enabled
money and being at the forefront with the certification process and construction contracts and the
of innovative solutions, it may be a subsequent release of payment to use of blockchain in information
little surprising that it hasn’t been contractors and subcontractors, sharing is still very limited. As with
more widely adopted already. It reducing unnecessary delays most new technologies it finds
would not be too unkind to say while increasing the confidence itself in the early stages of adoption
that one of the issues holding and cash flow of those working on and constrained by the themes of
back the adoption of blockchain the project. Given an opportunity unfamiliarity, confidence and trust.
is the simple awareness of what it to mature, it is not inconceivable Within the Middle East, particularly
is. Initial perceptions of blockchain that smart contracts would where we find large scale projects
are usually that it has something attract more competitive pricing with stakeholders located around
to do with cryptocurrency. While as elements of risk are no longer the world, the confidence and
that would not be incorrect, it ‘priced-in’. The potential for cost trust in this technology is still
is more accurate to say that savings in day-to-day construction developing. The issue of privacy
blockchain is the technology that management and the reduction and access to information within
allows cryptocurrency to function, in potential programme delays the blockchain will also need
as in simple terms blockchain is in this example alone could be careful management to reinforce
an incorruptible decentralised considered as revolutionary. this trust. The U.A.E. has already
ledger that facilitates the storing indicated that it will forge ahead
and sharing of data. Even a basic Advantages are not limited to the and adopt blockchain in many
understanding of how it functions construction phase. The nature of of its government functions.
brings exciting possibilities to light blockchain in ensuring information This bold approach might be the
for the construction industry. provenance and allowing a catalyst needed to encourage
multitude of contributors to create others, particularly those in the
Generally, the advantages of an accurate, up-to-date, building construction industry, to follow suit.
blockchain within the construction information database that details
industry centre around making all the assets and equipment
efficiencies in the speed of with in the building would have
information sharing, accuracy and significant advantages for
accountability. It also creates an handover management. As-built
opportunity to improve cash flow drawings would be complimented
through the adoption of ‘smart by fully up-to-date asset registers
contracts’. Blockchain-enabled that had been developed and
‘smart contracts’, where each reviewed during the construction
party agrees to share information process, resulting in an accurate,
and contractual obligations, are auditable list of assets. This would
satisfied upon the successful allow effective management of
processing of certain activities. warranties, the defects liability
This creates opportunities for period and planned preventative
reducing time spent chasing maintenance planning. When
payments as well as in delays implemented as part of Building
associated with making payments Information Modeling (BIM), which
relating to activities completed. is only as effective as the quality
Within project financing, the of information that feeds it, asset
release of funds drawn down managers will have a very powerful
from the loan facility could be tool at their disposal, enabling
dependent on completing key effective maintenance regimes and
activities. When submitted to mitigating risk of asset failures.
the chain, these activities trigger
automatic payment direct to the
intended recipient.
71
72
AECOM
03
REFERENCE
ARTICLES
IN BRIEF
74 78 83
Procurement Middle East Building regulations
routes terms of contract & compliance
73
PROCUREMENT
ROUTES
All clients expect projects to be on time and within
budget with an agreed level of quality and with the
risk rightly managed by their professional and
contracting team.
However, most clients and construction

professionals can name at least one project that
was not delivered to budget, time or the quality
levels expected. This is why the right procurement
strategy, one that balances risk and control against
the competing project objectives of cost, time and
quality, is key to a successful project outcome.
AECOM has developed Studies conducted with our key Which funding strategy,
strategies for the delivery clients who regularly undertake funding partner, team
of projects that we know development work have shown behaviours, attitudes,
work, successfully delivering that projects can be delivered communication channels,
hundreds of projects over our for 12-15 per cent less cost budget and program delivers the
long history. New and existing when procured correctly with best approach and how can we
developers have the opportunity no impact on quality or time. So best combine these to lead our
to learn from this knowledge what is the right procurement clients to ultimate success?
and maximise the value from approach for your projects?
their time, cost and quality mix,
whilst adhering to a process
that increases the likelihood of
their projects being successfully
procured by their team involved.
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AECOM
“
The right procurement
strategy, one that
balances risk and
control against the
competing project
objectives of cost, time
and quality, is key to
a successful project
“
outcome.
The Bridges, Abu Dhabi, U.A.E.

Image courtesy of Aldar Properties
75
AECOM MANAGEMENT OF THE

PROCUREMENT PROCESS
AECOM offers important early advice to help determine the right procurement
approach, adding value throughout the building process. This understanding of our
clients’ time, cost and quality requirements maximises the value we can offer.
Some of the procurement strategies followed in the industry are listed below, but the
real challenge is selecting the right approach for an individual client’s needs:
Traditional lump sum Two stage to a completion date, prior to
their appointment. The contractor
The design by the client’s A contractor is invited to become can either use the client’s
consultants is completed before part of the project team in concept design to complete the
contractors tender for and then stage 1, usually by way of a pre- design or use their own team to
carry out the construction. The construction fee or commitment finalise it. With design and build
contractor commits to a lump to preliminaries and mark-up it is important to design out or
sum price and a completion percentage. They jointly procure specify in detail those parts of
date prior to appointment. the project with of the client, the building the client wants
The contractor assumes until such time that a second to see perform a particular
responsibility for the financial and stage lump sum offer can be function or provide a particular
program risks for the carrying out agreed, which should be before visual impact.
of the building works, whilst the construction begins on site. An
client takes responsibility and understanding of the original Management contract
accepts the risk for the quality appointment and the subsequent
of the design and the design framework, under which the Design by the client’s consultants
team’s performance. The client’s second stage is agreed, are generally overlaps with the
consultant administers the the important aspects of this construction. A management
contract and advises on aspects approach, as well as working contractor is appointed early to
associated with design, progress with transparency and trust tender and let elements of work
and stage payments which preventing an early commitment progressively to subcontractors
must be paid by the client. to a full scheme that a client and specialists in work packages.
cannot afford. The contracts are between
Accelerated traditional the management contractor
Design and build and the trade contractors,
As per traditional lump sum, but rather than between the client
procured in the market place Detailed design and construction and sub-contractors. The
before being fully designed are both undertaken by a single management contractor will not
(normally 80-85 per cent contractor in return for a lump carry out construction work,
designed), leaving more simple sum price. There are variants but is employed to manage
elements of the building to be on this option depending on the process. The management
procured once the contractor has the degree to which initial contractor in theory assumes
been appointed. It is important to design is included in the client’s responsibility for the financial
understand how a client procures requirements. Where a concept (and program) risks for the works,
the remaining elements of work design is prepared by a design but in reality this is normally
with a contractor under this team employed directly by the diluted by the terms of the
approach and to design out those client before the contractor is contract so their liability is similar
areas that carry inherent risk early appointed (as is normally the to that of a construction manager.
in the process. It may also involve case), the strategy is called
the procurement of an early develop and construct. The
works package for enabling and/ contractor commits to a lump
or piling works. sum price, for completion of the
design and the construction and
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AECOM
Design, manage
and construct
Similar to the management
contract, with the contractor
also being responsible for the
production of the detailed design
or for managing the detailed
design process.
Turnkey contract
A form of a design and build
contract in which a single
contractor or developer is
responsible for all services,
possibly also including finance.
Under a turnkey project, the
client enters into a contract with
one party to deliver the entire
project. The project is handed
over once it is complete and
fully operational. The client is
normally not involved in any of the
decisions throughout the building
process. There are several
variations of ‘turnkey’ contracts,
including Engineer-Procure-
Construct (EPC), Build-Own-
Lease-Transfer (BOLR), Design-
Build-Operate-Transfer (DBOT),
or PFI.
Public private
partnerships (PPP)
A detailed and complicated
form of procurement used
predominantly for public services
when the private sector feels it
Engineer, procure and
is advantageous to design, build, construct (EPC)
finance and operate a particular
service or building type. It is EPC is a form of turnkey contract.
becoming more popular in the This form of procurement
Middle East as a way to limit places risk in the right hands
public sector spending whilst and offers solutions to clients’
meeting the demands of a engineering requirements from
growing population. AECOM those specialised to meet the
has been involved with PPPs performance requirements set
for over 20 years. We have by a client team. Many of the
successfully completed many large utility companies procure
projects worldwide and use this work in this way, bringing high
global knowledge to benefit levels of certainty from the supply
clients locally. chain which helps to achieve
business critical benefits over the
long term.
77
MIDDLE EAST
FORMS OF
CONTRACT
This section considers the different forms of
contract used in construction across the region.
Bahrain
United
Arab
Emirates
Oman
Kingdom of
Saudi Arabia Qatar
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AECOM
Kingdom of
Bahrain Saudi Arabia
Government work in the Kingdom of Construction contracts in the private

Bahrain is undertaken using a bespoke sector are generally based on FIDIC
suite of contract forms that were issued forms of contract and are amended
in 2009. to suit the particular conditions for
each project.
Private developers Design and build
predominantly and two-stage Employers prefer These conditions
use the current procurement are lump sum versus are generally based
FIDIC Conditions in use across the remeasured on those given in
of Contract for Kingdom but are not contracts and the 4th edition of the
Construction, the considered to be the normally exercise FIDIC Conditions of
1999 edition of the industry norm. As great control in the Contract for Works
‘red book’, which more international administration of of Civil Engineering
is well understood private developers the construction Construction, the
in the local market have started working process by imposing FIDIC 4 ‘red book’,
but often heavily in Bahrain with time various restrictions but with greater
amended for constraints as their on the engineer’s control given to
specific use. main driver, the (consultant) the employer for
market has adjusted authorities under the administration
Most of the work to accommodate the contract. All of the contract.
completed in Bahrain this demand. contracts are subject All public work
is under a traditional Design and build to Saudi laws where contracts are let on
lump sum form of contracts, however, Islamic Sharia is remeasured basis
contract, where the are not routine. the prime source of and subject to the
design is completed This is largely due legislation. Litigation Saudi Government
upfront and price to the Committee and arbitration Tendering and
agreed with a for Organising are both available Procurement
contractor before Engineering for resolution of Regulations,
work begins on site. Professional Practice disputes in the as issued by
(COEPP) restrictions private sector. Royal Decree. It is
on contractors also noted that a
undertaking in- Within the public number of the large
house design which sector, however, scale developments
necessitates the construction planned have
novation of the contracts are based aggressive schedule
client’s architect or on the Standard targets, and as
a sub consultant Conditions for Public such there is also a
appointment. Works, which are growing appetite for
amended to suit the Design & Build
particular projects. form of contract.
79
Oman
Public works in Oman are undertaken using a

bespoke government contract known as the
Standard Documents for Building and Civil
Engineering Works, 4th edition, 1999.
The document is based on Ministry of Transport Whilst some
early FIDIC contracts with
the 4th edition containing
only minor changes from
and Communications
document, Highway
Design Standards.
$150m+ of the larger
integrated tourism
developments have
Commonly
the 3rd edition, 1981. The use an amended used a design build
most important change is Oman Tender Board laws form of contract,
version of the
that the contract is now require all government design and build as a
FIDIC ‘red book’.
printed in Arabic. The projects to utilise the procurement route is
Ministry of Legal Affairs is Standard Documents not routinely used.
in the process of preparing on every project,
a new edition but its without amendment. As part of the
launch date is yet to be 9th five-year plan
In addition, the Tender (2016-2020) and
published. The Standard
Board facilitates all as a key initiative of
Document facilitates both
government tenders, the Government’s
a remeasurement and a
centrally, through the Tanfeedh program
form of lump sum contract
tender board process. Only to involve the private
dependant on choice
Royal Office and Royal sector and reduce
of clauses (although it is
Court of Affairs projects the Government
recognised that under
are exempt from this debt burden, the
the lump sum clause
process although they do Government is in the
the employer retains the
go through a similar internal process of drafting
risk with respect to BQ
tender process. Standard a PPP framework,
errors), and is based upon
documents are commonly regulations and
a fully completed design,
used by private sector law which may be
specification and bill
clients in the local market, accompanied by
of quantities.
particularly for small-to- the introduction
The RICS Principles medium sized contracts. of further forms of
of Measurement Private clients tend to contract designed to
(International) are the most prefer the 3rd edition as suit PPP projects.
widely used method of this is written in English,
measurement although but varies only in a minor
quasi-government and way from the Arabic 4th
private clients are exploring edition — preferred by the
alternatives and RICS New government ministries.
Rules of Measurement International and private
are increasingly being sector clients with large
used. Infrastructure project contracts, USD150
projects have their own million-plus, commonly use
method of measurement, an amended version of the
as detailed within the FIDIC red book’.
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AECOM
United
Qatar Arab
Emirates
In Qatar the most common forms Construction contracts in the U.A.E. are
for building works are those issued predominantly based upon the FIDIC
by the Public Works Authority forms of contract.
(PWA), the Ministry of Municipality
The growing number Civil works
and Environment (MME) and Qatar
of large scale contracts
Petroleum (QP). developers and within the U.A.E.
The contracts The market major repeat clients are mostly
are generally on predominantly uses in the region has led procured on a
a fixed price lump the FIDIC forms of to the development remeasurable
sum basis, using contract and is still of bespoke forms of basis, whereas
bills of quantities heavily reliant upon contract, tailored to building works
or specifications the 1999 version. In each individual client. will generally be
and drawings. The the private sector, Such contracts based on a fixed
contracts are more similar contractual generally use the price lump sum.
biased towards arrangements are FIDIC 4 ‘red book’
clients, wherein the adopted due to form as a basis, However, there are
contractor buys all familiarity, however amended to a exceptions. More
the project risks heavily amended greater or lesser and more clients are
and an increased versions of the degree depending procuring projects
initial price, however FIDIC form are upon the risk profile using a fast track
are generally presently used to of each client. This approach and will
administered in a suit specific needs. also applies to works therefore incorporate
reasonable manner. These are however procured by Dubai a remeasurable
are often poorly Municipality. Abu element, reflecting
In recent drafted resulting in Dhabi Municipality, those parts of the
developments the ambiguities. however, bases design that are
Qatari Government its contracts on a incomplete at
has released tenders The Public Works modified FIDIC 3 tender stage.
using a Public Authority (Ashghal) form, taken from
Private Partnership has recently released the 3rd edition of the There is also a
(PPP) approach a new suite of FIDIC conditions of growth in appetite
with the aim of contracts with more Contract for Works for the use of design
attracting foreign contractor friendly of Civil Engineering and build forms of
direct investments terms, wherein they Construction. contract, with clients
using design, build are now tailored intending to transfer
and maintenance to a particular Contracts based on a large share of
procurement route. procurement route the 1999 ‘red book’ the risk on to the
It is expected this more suitable are often used in the contractors.
route shall become to the individual U.A.E., but in general
more prominent project need. This the market remains
within newly- approach should firmly rooted in the
established free reduce the volume FIDIC 4 form.
trade zones. of amendments
included in tenders.
81
82
AECOM
BUILDING
REGULATIONS
AND COMPLIANCE
This section outlines the procedures for obtaining
building permission across the region.
AECOM’s project management team is experienced in the procedures for obtaining building permits
across the region and is able to oversee this process.
BAHRAIN
Procuring a Municipal and other authorities. Stage 4 Stage 6
Building Permit Specific criteria is listed Building permit Fee payment
in Bahrain is now out within the online application and third
portal and should the party declaration Once the submission
completed through the has been reviewed and
project fall under any
online portal, Upon agreement with there are no objections/
of the requirements
Benayat, over a seven- then the pre-planning the third party checker non-conformities the
stage process: approval is required. the documents are municipal charges
to be uploaded to the must be paid for the
Stage 1 Stage 3 online network. The following elements:
Prepare drawings Third party checker third party checker
must, within seven days, – Building permit fees
The client must Before the building validate the application
engage a consultant to – Building permit
permit submission and online to allow the insurance deposit
prepare the necessary after the pre-approval, process to move
architectural and if required, the building to the government – Infrastructure fees (if
engineering drawings permit package is to entity review. applicable)
and documents be submitted to a third – Civil Aviation fees (if
for the next stages party engineering firm Stage 5 applicable).
of submission. It is to review and confirm Government
generally sufficient to its compliance with entities review Stage 7
include simple outline the building code and Issue of
plans, cross-sections to application criteria. Once the submission building permit
indicate overall heights is made and the third
and an area statement. The reviewing firm must party checker validates Upon payment of
be of a similar grade the government the fees the building
Stage 2 to the submitting firm entities will review and permit, along with any
Obtain preapproval and must be registered provide any conditions. conditions, will be
with the Council The main authorities issued electronically
Certain projects will involved at this stage via the Benayat system
require a pre-approval for Regulating the
Practice of Engineering are the Municipality, for works to proceed.
from the Urban Planning Sanitary Engineering
Development Affairs, Professions (CRPEP).
A full list of firms is Planning and Projects
Road, Planning & Design Directorate (SEPPD) and
Directorate (RPDD), provided on the
Benayat portal. Electrical Distribution
Civil Aviation Authority Directorate (EDD).
83
KINGDOM OF SAUDI ARABIA

Obtaining a building permit in the Kingdom of Saudi Arabia varies from region to region, however they tend
to follow the same basic principles. The various procedures and approvals from the main municipality, the
branch municipality and the fire department need to be obtained. Obtaining these approvals typically takes
between three to four months depending on the nature and size of the building/project.
The following is a general outline of the steps needed to obtain a building permit.
Stage 1 Stage 2 Stage 3

Obtaining letter from Obtaining preliminary Obtaining approval from
the main municipality location/permit from the fire department
branch municipality
A letter from the owner is The branch municipality writes
submitted to the main Riyadh The owner submits a copy of to the fire department, or civil
municipality, along with a copy of the letter obtained previously defence, to obtain its approval of
the land deed. The municipality from the main municipality to the the plan submitted by the owner
checks the masterplan of the branch municipality, requesting for the fire-alarm and fire-fighting
area to ensure the suitability of an inspection of the plot systems. The fire department
the plot for the construction to ensure that the plot length, approves these plans and sends
of a building. The municipality width and total area are as them back to the municipality.
then writes a letter to the indicated on the deed. The This process takes ten days
branch municipality of the area branch municipality then issues and does not incur a charge.
where the plot is located. This an approval to use the
process takes five days and land. This process takes five days Stage 4
does not incur a charge. and does not incur a charge. Obtaining a final
building permit
The branch municipality issues a

building permit and sends it to the
main municipality for approval,
which is given dependent on the
nature of the building. The owner
can collect the permit from the
main municipality after one to
three months. The cost of this
permit is SAR 1,200.
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AECOM
OMAN
The following is a general outline of the procedure for obtaining a building permit in the Sultanate of Oman,
however there are many further obligations and procedures to be completed within each of the stages. It
is generally the responsibility of the lead consultant to obtain the building permit, although all applications
must be signed off and submitted by locally-registered consultants.
Stage 1 Stage 3
Submitting concept design/ Submitting a building
masterplan stage application permit application
The applicant submits a concept The full building permit

design/masterplan application application, including all
to the Ministry of Housing - NOCs, is submitted to the
Directorate General of Planning relevant municipality or
for approval of the proposed statutory authority.
usage. At the same time utility
requirements are identified Stage 4
and indicated to the relevant Obtaining building
utility providers. If the project is occupancy certificate
tourism related, further approvals
are required from the Ministry Upon completion of the building
of Tourism and the Supreme works, it is the responsibility
Committee for Town Planning. of the construction contractor
or lead consultant to obtain
Stage 2 the occupancy permit. This is
Obtaining No Objection achieved by having the building
Certificates (NOCs) permit signed off, effectively
closing it out. To obtain this
No Objection Certificates closure, the contractor must
are obtained from various obtain certificates and signatures
governmental and municipal from various government
departments, including, departments, including Civil
Royal Oman Police, Security Defence, Food and Hygiene, etc,
Department, Traffic Department prior to presenting these to the
and Civil Defence, Ministry of municipality or statutory authority
Environment, Municipality Road for final approval.
Department, Ministry of Transport
& Communications, Civil Aviation,
and many more project-specific
ministry departments, e.g.
Ministry of Education if the
project is a school or university.
85
QATAR
Compared with many other countries, the planning and building approval process in Qatar is relatively
clear and structured.
Land ownership, other than by Qatari nationals and the state, is still extremely limited. The key process
in securing development rights is obtaining a land title or ‘PIN’, since without it all other permits and
applications cannot be commenced. Once the land is secured, the project masterplan is submitted for
approval to the Planning Department and local municipality offices.
Stage 1 Stage 3 Recently a number of revisions

DC1 approval Final stage/building permit have been made to the design
standards of buildings, in
General overviews and strategies Once the DC2 approval is particular high rise structures.
for the utilities and primary secured a further set of standard These address issues such as
infrastructure are submitted forms are circulated with a fire safety, refuge areas, the use
to the relevant utility service consolidated set of documents of lifts in the event of fire, and
providers for comment. During for final signing and approval. the nature and extent of
this process each department These documents constitute the façade glazing.
generally issues a series of building permit.
reference numbers that are Fit out and refurbishment
then used as the file number As a general guide the whole projects now follow a similar
for all future submissions. The process usually takes at least 80 DC1 and DC2 process, a change
culmination of this round of days (duration for private sector from the requirement to obtain
submissions is the DC1 approval. is stated in the KPI document a maintenance permit before
As the design develops, a second issued by MME in relation to the work commenced. The approval
round of submissions is made corresponding size and type of process is now under the control
to the same utility departments the project), depending upon of the Ministry of Municipality
for final approval. In addition, a the quality of the submission, & Approvals.
submission is made to the Qatar although in practice if often takes
Civil Defence (QCD) department much longer due to comments This submission must be made
who review the fire and life safety from different departments and by a registered local consultant
aspects of the project. progressive design revisions. and failure to do this can
significantly delay the approval
Stage 2 During the whole of this and permitting process.
DC2 approval process, it is generally not
advisable to revise or modify The statutory approval
As the design develops, a second any submission as it may delay
round of submissions is made process comprises of multiple
the approval process. stages that in turn, dictate the
to the same utility departments
for final approval. In addition, a program parameters.
All submissions have to be
submission is made to the Civil either in Arabic or bilingual
Defence department who review and endorsed by locally-
the fire and life safety aspects of registered and approved design
the project. companies. International
companies cannot make these
Depending upon the scale and submissions by themselves.
nature of the project, separate
traffic studies may be required There are some parts of Qatar
and these would be submitted to that are exempt from the building
the Road Affairs Department for permit approval process. These
approval. Qatar Civil Defence may are generally related to oil and
request modifications to ACMV, gas production facilities.
FF/FA at this stage.
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AECOM
The stages are as follows:
Opening of the file DC1 DC2 Building permit

Submission of MME Fire/life safety Fire fighting, fire alarm, MME forms for
documents/forms (consists of egress ACMV (upon request), construction.
and architectural paths, occupancy load, emergency lighting
preliminary drawings. emergency lighting, and Kharamaa loads
fire ratings, etc) and confirmation
Kharamaa drawings. (if requested by MME).
Following approvals from all of the required stages, The main risks associated with civil defense
and receipt of the municipality building permit, it approvals and municipality building permits are
is only then that officially marks the time works may as follows:
then commence on site. However, at the landlord’s
discretion, mobilisation and demolition works – Submission of incorrect information, resulting
may commence. in rejection of the application.
– Administrative delays within the

Civil Defense Department.
– Public holidays and governmental shutdowns.
Al Janoub Stadium, Al Wakrah, Qatar

Image courtesy of Hufton+Crow
87
UNITED ARAB EMIRATES

The following is a general outline of the procedure for obtaining a building permit in the U.A.E., but there
are many further obligations and procedures to be completed within each of the stages. Building permit
application Stage 3, for example, requires no less than 15 different forms, documents and separate
approvals to be submitted as part of the application.
It is the responsibility of the construction contractor or lead consultant to obtain the building permit,
although all applications must be signed by locally registered consultants.
Stage 1 Stage 2 Stage 3

Submitting Obtaining Submitting building
preliminary application No Objection Certificates permit application
The applicant submits a No Objection Certificates The full building permit

preliminary application to the (NOCs) are obtained from application, including all
relevant municipality or statutory various governmental and NOCs, is submitted to the
authority and pays a deposit. municipal departments relevant municipality or
including civil defence. statutory authority.
Fire department, drainage, Stage 4

communication, water and Obtaining building permit
electricity, civil aviation, oil and
gas, coastal and military. On approval, the applicant
collects the building permit
and applies for a
demarcation certificate.
Stage 5
Obtaining building
occupancy certificate
Application form 1,2 and

3 must be submitted for a
building license with a series of
documents (including deed of
title, contracts with accredited
engineering firm, original copies
of plans, original soil test report,
approval from all relevant
authorities, compliance forms for
all regulations.
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AECOM
Reflections Project, Abu Dhabi, U.A.E.

Image courtesy of Aldar Properties
89
90
AECOM
04
REFERENCE
DATA
IN BRIEF
92 100 102 104
International building Regional building MEP costs Major measured
cost comparison cost comparison unit rates
105 106 107 108

Major Labour costs U.A.E. indices Typical building
material prices services standards
for offices
109 110
Exchange rates Weight and
measures
91
INTERNATIONAL
BUILDING COST
COMPARISON
The international cost data
shown is a comparison of local
construction costs converted to
U.S. dollars to enable comparison.
The building costs for the Costs are subject to
respective asset types are considerable variations due to
averages based on local factors such as:
specifications. The actual
cost of a building will depend – Local marked conditions
on, among other things, – Project complexity
unique site conditions, design – Commodity price movements
attributes and applicable
tariffs. In addition, the – Building specifications
standard for each building – Exchange rates
varies from region to region,
which may have a significant
impact on costs.
If AECOM project image, add

project name and location. Also
check for NDAs if any.
For external parties images, make

sure we have written permission
to use the image on external
publications and add a
source/copyright statement.
Edition Hotel, Abu Dhabi, U.A.E. If the image shows construction

Image courtesy of Bloom Holding
underway, check it with SH&E
92
AECOM
EXCHANGE RATE TRENDS

Exchange rate trends up to September 2019
Currency movements of the U.S. dollar against major currencies
Q2 2019 compared to Q2 2018
Brazil (BRL)
U.K. (GBP)
Australia (A$)
South Africa (ZAR)
Euro (EUR)
New Zealand (NZD)
China (CNY)
Malaysia (MYR)
Canada (CND)
Singapore (SGD)
Russia (RUB)
Hong Kong (HKD)
India (INR)
Turkey (TRL)
Japan (JPY)
20% 10% 0% 10% 20% 30% 40% 50%
Source: Bank of England, www.xe.com
In recent years, exchange rate movements Currency depreciation against the U.S. dollar
have been significant, as diverging economic translates into a relative drop in building costs when
performance has led to many major currencies expressed in U.S. dollar, making these locations/
experiencing major shifts against the U.S. dollar. regions relatively cheaper in U.S. dollar terms.
Forex rate states a country’s economic stability
is illustrated by the foreign exchange rate, leading
factors can influence fluctuations which are
constantly analysed:
– Interest rates
– Country’s current account balance
– Government debt
– Political stability: (Brexit, trade uncertainty and
shifts, elections)
– Recession
– Commodity markets
– International trade.
93
International construction
cost inflation
International construction cost inflation
Quarter y-o-y change; Q1 2009 - Q3 2019
Source: Based on AECOM Indices for U.K., U.A.E.; ENR U.S. Construction Cost Index; Singapore
Building Construction Authority, Hong Kong Building Works Tender Price Index, EuroaArea Eurostat
Construction Output Index, India CIDC Construction Cost Index, AIQS Building Cost Index
94
AECOM
Average building cost for standard

residential high rise
Average building cost for standard residential high rise
USA, New York
USA, San Francisco
UK, London
USA, Los Angeles
Australia, Sydney
China, Hong Kong
Singapore
UAE, Dubai
KSA, Riyadh
Thailand, Bangkok
South Africa, JHB
China, Shanghai
China, Beijing
Vietnam, Ho Chi Minh
Malaysia, Kuala Lumpur
0 1,000 2,000 3,000 4,000 5,000
USD / sqm
Average building costs (USD /sqm)

Ho Chi Minh City
Johannesburg
San Francisco
Kuala Lumpur
Los Angeles
South Africa
Hong Kong
Singapore
Singapore
Shanghai
New York
Bangkok
Australia
Malaysia
Thailand
Vietnam
London
Sydney
Beijing
Riyadh
Dubai
China
China
China
USA
USA
USA
KSA
UAE
UK
Building type
Average multi
3,566 3,300 829 835 544 1,900 979 1,057 1,850 4,100 4,200 4,850 4,166 733 1,650
unit high rise
Luxury unit
4,167 4,600 1,624 1,560 913 3,300 1,246 1,572 2,200 5,200 5,300 6,250 5,841 918 2,100
high rise
Individual prestige
4,850 6,300 922 920 788 3,100 1,239 1,649 N/A 4,900 5,500 5,850 5,795 658 N/A
houses
(As at 1 April 2018) AUD HKD CNY CNY MYR SGD ZAR THB AED USD USD USD GBP VND SAR
US $1 = 1.40 7.85 6.71 6.71 4.08 1.35 14.17 31.71 3.67 1.00 1.00 1.00 0.76 23197 3.75
Note: Prices exclude land, site works, professional fees, tenant fit out and equipment. Rates exclude GST/VAT.
Costs based on 1 July 2019. Exchange rates to USD as at 1 April 2019. Source AECOM
95
Average building cost for

standard offices high rise
Average building cost for standard offices — high rise
USA, New York
USA, San Francisco
UK, London
USA, Los Angeles
Australia, Sydney
China, Hong Kong
Singapore
UAE, Dubai
KSA, Riyadh
China, Beijing
China, Shanghai
Thailand, Bangkok
South Africa, JHB
0 1,000 2,000 3,000 4,000 5,000 6,000
USD / sqm
Average building costs (USD/sqm)

Ho Chi Minh City
Johannesburg
San Francisco
Kuala Lumpur
Los Angeles
South Africa
Hong Kong
Singapore
Singapore
Shanghai
New York
Bangkok
Australia
Malaysia
Thailand
Vietnam
London
Sydney
Beijing
Riyadh
Dubai
China
China
China
USA
USA
USA
KSA
UAE
UK
Building type
Average standard
4,439 3,150 1,071 1,055 875 2,400 944 954 1,850 4,500 4,700 6,000 4,659 834 1,575
offices high rise
Prestige offices
5,191 3,950 1,527 1,600 1,338 3,100 1,215 1,134 2,200 4,870 5,000 6,500 5,759 1,265 1,900
high rise
Major shopping
3,730 4,600 1,320 1,532 1,425 3,400 930 905 1,700 3,700 4,000 4,300 5,078 860 1,425
center (CBD)
US $1 = 1.40 7.85 6.71 6.71 4.08 1.35 14.17 31.71 3.67 1.00 1.00 1.00 0.76 23197 3.75
Note: Prices exclude land, site works, professional fees, tenant fit out and equipment. Rates exclude GST/VAT.
96
AECOM

light duty factory
Average building cost for light duty factory
USA, New York
China, Hong Kong
UK, London
USA, San Francisco
USA, Los Angeles
UAE, Dubai
Australia, Sydney
KSA, Riyadh
Singapore
Thailand, Bangkok
China, Shanghai
South Africa, JHB
0 1,000 2,000 3,000 4,000 5,000
USD / sqm
Average building costs (USD/sqm) Ho Chi Minh City

Johannesburg
San Francisco
Kuala Lumpur
Los Angeles
South Africa
Hong Kong
Singapore
Singapore
Shanghai
New York
Bangkok
Australia
Malaysia
Thailand
Vietnam
London
Sydney
Beijing
Riyadh
Dubai
China
China
China
USA
USA
USA
KSA
UAE
UK
Building type
Light duty
792 2,450 N/A 550 525 700 341 567 850 1,600 1,600 2,900 1,910 361 750
factory
Heavy duty
997 N/A N/A N/A 575 900 592 902 1,000 2,000 2,100 3,800 3,277 4,646 900
factory
Multi-storey
1,024 1,700 N/A N/A 345 700 285 593 675 1,400 1,680 1,500 936 364 N/A
car park
District
6,386 5,800 N/A 1,530 1,025 2,900 1,894 N/A 2,700 6,890 7,500 8,900 4,706 N/A 1,530
hospital
Primary &
2,623 2,800 N/A N/A 375 N/A 521 N/A 1,525 4,500 4,800 4,800 3,015 N/A N/A
secondary schools
US $1 = 1.40 7.85 6.71 6.71 4.08 1.35 14.17 31.71 3.67 1.00 1.00 1.00 0.76 23917.24 3.75
Note: Prices exclude land, site works, professional fees, tenant fit out and equipment. Rates exclude GST/VAT. Source AECOM
Costs based on 1 July 2019. Exchange rates to USD as at 1 April 2019.
97

5 star luxury hotel
Average building cost for a five-star luxury hotel
Australia, Sydney
UK, London
USA, New York
USA, Los Angeles
USA, San Francisco
China, Hong Kong
UAE, Dubai
Singapore
China, Shanghai
KSA, Riyadh
China, Beijing
Thailand, Bangkok
South Africa, JHB
0 200 400 600 800
USD thousands / key
Average building costs (US$/key)

Ho Chi Minh City
Johannesburg
San Francisco
Kuala Lumpur
Los Angeles
South Africa
Hong Kong
Singapore
Singapore
Shanghai
New York
Bangkok
Australia
Malaysia
Thailand
Vietnam
London
Sydney
Beijing
Riyadh
Dubai
China
China
China
USA
USA
USA
KSA
UAE
UK
Building type
5 star luxury 736,336 480,000 292,330 304,500 310,000 321,400 179,577 250,000 350,000 493,000 485,000 535,000 596,169 195,051 300,000
3 star budget 362,020 225,000 N/A N/A 166,900 57,100 57,042 6,500 90,000 85,000 85,000 89,000 98,316 N/A 80,000
Resort style N/A N/A 483,115 N/A 281,300 214,300 N/A 300,000 650,000 308,000 304,000 304,000 366,068 231,333 N/A
US $1 = 1.30 7.85 6.71 6.71 4.08 1.35 14.17 31.71 3.67 1.00 1.00 1.00 0.76 22786 3.75
Note: Prices exclude land, site works, professional fees, tenant fitout and equipment. Rates exclude GST/VAT.
Hotel rates include FF&E.
98
AECOM
Middle East Relative Cost of Construction
Middle East relative

cost of construction
Relative cost of construction are based on typical build costs in USD. Influence of foreign exchange fluctuations, unique
site conditions, design attributes and applicable tariffs must be considered when comparing actual projects.
Relative costs are based on an average across all sectors.
Qatar (Doha)
UAE (Dubai)
Bahrain (Manama)
KSA (Riyadh)
80 85 90 95 100 105 110 115 120
Note: Relative cost of construction are based on typical build costs in USD. High and low cost factors for each building type have been
calculated relative to the U.A.E. (Dubai), where average costs equal 100. The relative cost bars plotted in the chart represent the average
high and low cost factor for each country, based on the costs of the buildings included in the sample (excluding commercial fit-outs).
99
REGIONAL BUILDING
COST COMPARISON
Building cost (US$/sqm) UAE KSA Qatar Bahrain
(Dubai) (Riyadh) (Doha) (Manama)
Typology Low High Low High Low High Low High
Residential
Low rise 950 1,450 500 800 1,300 1,600 800 1,350
Medium rise 1,000 1,550 950 1,200 1,600 1,850 1,050 1,600
High rise 1,500 2,200 1,200 2,100 1,900 2,150 1,450 2,000
Villas 1,100 2,200 N/A N/A 1,400 2,700 650 1,350
Commercial
Low-rise office (shell & core) 1,100 1,400 700 1,100 1,300 1,600 1,050 1,450
Mid-rise office (shell & core) 1,250 1,800 1,050 1,450 1,600 1,950 1,200 1,600
High-rise office (shell & core) 1,500 2,200 1,250 1,900 1,900 2,300 1,450 2,050
Fit out — basic 950 1,500 700 950 1,300 1,800 650 950
Fit out — medium 1,500 1,900 950 1,250 1,700 2,200 950 1,200
Fit out — high 1,950 2,500 1,250 1,650 2,000 2,750 1,200 1,600
Retail
Community 1,300 1,550 700 950 1,200 1,450 1,050 1,350
Regional mall 1,350 1,650 900 1,300 1,300 1,750 1,200 1,600
Super regional mall 1,500 1,900 1,250 1,600 1,300 2,000 1,450 1,850
Industrial
Light duty factory 750 950 650 850 900 1,050 800 1,050
Heavy duty factory 900 1,100 800 1,000 1,050 1,300 950 1,200
Light industrial unit 650 750 600 900 750 900 650 950
Data center — Tier 3 (based on AED/kW(IT)) 19,650 22,450 18,700 21,450 21,150 24,100 N/A N/A
Hotel
Budget 1,700 1,900 1,350 1,650 2,500 2,650 1,550 1,800
Mid market 2,000 2,600 1,650 2,250 2,700 3,650 1,650 2,250
Up market 2,700 3,500 2,100 2,650 3,700 4,400 2,100 2,650
Resort 3,200 3,700 2,650 4,000 4,100 4,950 2,500 3,350
Car parks
Multi storey 550 800 550 650 812 950 450 650
Basement 850 1,200 800 950 886 1,050 650 1,000
Other
Schools — primary, secondary academy 1,350 1,700 800 1,350 1,613 2,200 1,400 1,800
Healthcare — district hospital 2,200 3,200 1,950 2,750 2,350 3,500 2,500 3,050
Exchange rate to 1 US$ AED 3.67 SAR 3.75 QAR 3.64 BHD 0.37
Note: All costs are based on Q4 2019.

For typology definitions, inclusions and exclusions see Appendix 1.
Relative cost of construction are based on typical build costs in USD.
No Investment or other business decision should incorporate the rates in the above table without first contacting
AECOM for further information / clarification.
Influence of foreign exchange fluctuations, unique site conditions, design attributes and applicable tariffs must be
considered when comparing actual projects.
Relative costs are based on an average across all sectors. Source AECOM
100
AECOM
Inclusions and exclusions by asset typology

and basis of construction costs
Asset class Cost inclusions Cost exclusions

Residential – Fit out works
– MEP services installations
– Lift services installations
Commercial offices – Internal finishes — lobby and core areas only – Internal finishes to offices
– Fit out works — lobby and core areas only – MEP services installations to offices
– MEP services installations — lobby and core – Active IT and phone equipment
areas only
– Lift services installations
Fit out (commercial offices) – Fit out works — architectural – Active IT and phone equipment
– Fit out works — MEP services
– Specialist installations (AV, IT, security)
– FF&E
Retail – Front of house fit out – Tenant fit out
– Loose furniture and operators equipment
– Kitchen and laundry equipment
– Active IT equipment
Industrial (light duty factory) – Internal services – Storage/racking systems
– FF&E – IT and CCTV active equipment
– OS&E
– Production, process and laboratory equipment
– Waste water treatment plant, compressed
air plant
– Process water and drainage systems
– N+1/2 redundancy
– Humidity/environmental control/conditioning
other than standard air conditioning
– Ultra flat slabs
Data centers – Active equipment
– FF&E
– Utilities outside the building outline
– Modular construction (based on one complete
data center)
Hotel – Fit out – Pre operating expenses
– Loose furniture and operators equipment – Client soft costs
– Kitchen and laundry equipment
– Active IT equipment
Healthcare, education – Fixed fit out works only – All loose fit out and ICT
– All medical equipment
Note: All costs are based on Q3 2019
General notes General cost inclusions General cost exclusions

– The building costs for the respective asset types are averages based on – Construction works – External works and landscaping
competitive tenders analysed by AECOM. It must be understood that the – Main contractor – Site infrastructure
actual cost of a building will depend on the design and many other factors preliminaries – Enabling works
and may vary from the figures shown. and OH&P – Basements podiums
– Due to the volatile nature of the current market, it is possible that tenders and car parks
will be received outside these ranges. Professional advice should be – Contingencies
sought for specific projects. – Undefined provisional sums
– The standard for each building varies from region to region. – Utility connection charges
– General and specific cost inclusions and exclusions – Statutory fees and charges
are listed below. – Professional fees
– Relative costs of construction are based on typical build costs in USD. – Client direct costs
Influence of foreign exchange fluctuations, unique site conditions, design – Land acquisition
attributes and applicable tariffs must be considered when comparing – Finance charges
actual projects. – LEED silver or above
– Staff accommodation
– Pre-opening expenses
– Mock ups
– VAT
101
MEP COSTS
UAE KSA Qatar Bahrain
MEP cost (US$ / sqm)
Typology Low High Low High Low High Low High
Residential
Low rise 270 340 290 480 390 480 230 360
Medium rise 360 470 430 520 480 570 360 500
High rise 520 700 650 820 570 800 540 700
Villas 330 660 N/A N/A 400 790 195 405
Commercial
Low-rise office (shell & core) 360 430 200 370 440 540 370 510
Mid-rise office (shell & core) 420 590 370 490 540 640 470 560
High-rise office (shell & core) 510 640 570 870 640 820 660 900
Fit out — basic 360 490 200 290 440 640 240 330
Fit out — medium 490 640 290 370 640 820 300 420
Fit out — high 650 830 430 570 820 1,030 390 600
Retail
Community 360 430 240 340 460 540 360 450
Regional mall 430 560 380 520 520 690 410 500
Super regional mall 450 590 490 700 520 760 450 590
Industrial
Light duty factory 260 310 250 330 290 350 540 740
Heavy duty factory 350 430 250 330 340 440 670 940
Light industrial unit 160 200 200 250 220 260 330 470
Data center — Tier 3 (based on AED/kW(IT) 14,310 16,490 13,610 15,780 15,860 18,340 N/A N/A
Hotel
Budget 430 480 540 650 630 800 470 560
Mid market 500 650 650 870 680 1,100 510 680
Up market 680 880 1,030 1,190 930 1,320 680 860
Resort 800 930 1,190 1,420 1,030 1,490 750 1,090
Car parks
Multi storey 120 190 183 217 200 290 80 130
Basement 220 300 250 290 230 320 180 280
Other
Schools — primary, secondary academy 450 620 290 480 400 660 370 490
Healthcare — district hospital 910 1,420 770 1,220 850 1,480 1,160 1,410
Exchange rate to 1 US$ AED 3.67 SAR 3.75 QAR 3.64 BHD 0.37
102
AECOM
Basic specification of assets
Asset type Residential Asset type Industrial

Typology Low rise Mid rise High rise Typology Light duty Heavy Light Data
Specification Basic, medium Basic, medium Basic, medium factory duty industrial center —
and high and high and high factory unit Tier 3
Key design characteristics Specification Basic Basic Basic Basic
Building height G+1 to G+3 G+4/5 to G+20 G+20 Key design characteristics
and above
Building 8 10 6 6
GIA 80,000 - 50,000 - 90.000 - height
140,000 80,000 120,000
GIA 10,000 20,000 6,000 4,000
BUA 85,000 - 55,000 - 105,000 -
155,000 90,000 135,000
Wall : Floor 0.33 0.30 0.38 0.35
Efficiency (%) 85 - 100% 80 - 85% 70 - 80% ratio
Units per core 1-2 10 - 20 4-6
Wall:Floor ratio 0.50 - 0.80 0.45 - 0.65 0.45 - 0.55
Net to gross 80 - 100% 75 - 85% 65 - 75% Asset type Hotel
GIA per unit 200 - 450m² 90 - 200m² 145 - 165m² Typology Budget Mid Up market Resort
market
Specification Basic Mid range Luxury High end
Asset type Offices
Key design characteristics
Typology Low rise Mid rise High rise
Building G+10 G+10 G+15 G+6
(shell and core) (shell and core) (shell and core)
height
Specification Basic, medium Basic, medium Basic, medium
and high and high and high GIA 16,000 - 13,500 - 56,000 - 39,000 -
18,000 15,500 60,000 41,000
Key design characteristics
Wall:Floor 70% 75% 75% 55%
Building height G+1 to G+5 G+5 to G+20 G+20
ratio
and above
Functional 350 200 350 200
GIA 10,000 - 25,000 - 100,000 -
units
25,000 75,000 250,000
BUA 13,000 - 30,000 - 130,000 -
30,000 100,000 280,000
Efficiency (%) 70 - 85% 70 - 85% 70 - 85% Asset type School Healthcare
Wall:Floor ratio 0.40 - 0.70 0.40 - 0.60 0.40 - 0.50 Typology Primary/secondary District hospital
Net to gross 50 - 60% 50 - 60% 50 - 70% academy
Slab to 4.0 - 5.0m 4.0 - 4.5m 4.0 - 4.5m Specification Mid range Mid range
slab height Key design characteristics
Grid spans 7 - 12m 9 - 12m 9 - 12m Building height 10 24
(m)
GIA (m²) 21,000 - 22,000 50,000
Asset type Retail No of lift core 1 4
Typology Community Regional Super regional No of 9 6
Key design characteristics stair core
Finishes Mid range High High

GFA (m²) Not 30,000 - > 100,000
exceeding 100,000
30,000
103
MAJOR MEASURED
UNIT RATES
Item Unit Description UAE KSA Qatar Bahrain
(Unit rates in US$) (Dubai) (Riyadh) (Doha) (Manama)
Excavation m3 Standard/minimum specification 7 8 11 8

excavation for trench foundation;
depth not excessive, i.e. no greater
than 1-2 metres
Disposal of excavated m3 Standard/minimum specification 6 6 8 4

material disposal away from site
Filling m3 Imported fill 15 17 33 19
Poured concrete, m3 Standard/minimum specification 109 132 180 159

reinforced grade 20 or 30; superstructure, walls
or slabs; reinforced
Reinforcement tn Standard/minimum specification 1,080 1,374 1,142 1,032

20mm bars
Formwork/shuttering m2 Standard/minimum specification 30 39 43 19

superstructure standard; fair face
finish to walls
Blockwork m2 Standard/minimum specification 36 36 55 24

200mm solid blockwork, usually
internal walls
Doors no. Standard/minimum specification 1,087 1,135 1,374 847

single leaf door, fire rated, timber,
basic finish, usually 900mm wide,
generally excluding ironmongery
Tiling to floors m2 Standard/minimum pecification 34 55 62 32

300 x 300mm ceramic tiles
Plaster to internal walls m2 12.5mm thickness 15 11 15 8

and ceilings
Painting to internal m2 Standard/minimum specification 10 8 7 7
walls and ceilings emulsion
Exchange rate to 1 US$ AED SAR QAR BHD

3.67 3.75 3.64 0.37
104
AECOM
MAJOR MATERIAL
PRICES
Item Description Unit UAE KSA Qatar Bahrain
USD USD USD USD
Cement Ordinary Portland cement Tonne 85 81 83 85
Sand Sand for concreting m³ 13 13 15 22
Aggregate 19mm aggregate m³ 18 15 44 38
RMC Grade 50 (OPC) m³ 76 79 112 101
Grade 40 (OPC) m³ 71 73 108 95
Grade 20 (OPC) m³ 65 63 97 90
Reinforcing steel High tensile Tonne 735 543 999 688
Mild steel Tonne 714 543 829 661
Hollow concrete 100mm thick m² 41 9 10 9

blockwork
200mm thick m² 49 12 16 11
Structural steelwork Mild steel grade 50 to BS 4360 Tonne 1,035 1,601 2,495 1,058
Timber Hardwood m³ 792 800 1,206 934
Softwood m³ 303 467 804 331
Fuel Diesel Litre 0.48 0.15 0.51 0.40
Petrol Premium 95 Litre 0.48 0.55 0.49 0.53
Exchange rate to 1 US$ AED SAR QAR BHD

3.67 3.75 3.64 0.37

Cost rates are indicative and represent supply only costs of the materials listed.
Location factors should be applied to address geographic variations in each country.
The rates are exclusive of VAT or similar, where applicable.
105
LABOUR COSTS
Description Unit UAE KSA Qatar Bahrain
USD USD USD USD
Skilled operatives
Concreter Hour 5.90 6.80 6.00 6.60
Steel fixer Hour 5.90 7.30 6.00 6.10
Bricklayer Hour 6.50 7.30 7.50 6.60
Carpenter Hour 6.50 7.30 7.50 6.10
Mechanical installer Hour 8.40 9.50 6.90 7.20
Electrician Hour 9.00 9.00 9.00 6.60
Laborer (skilled) Hour 5.70 5.40 6.00 4.50
Foreman Hour 11.20 12.20 12.50 9.30
MEP foreman Hour 12.60 15.00 12.50 9.30

These rates (US$) are indicative and represent an all-in unit cost for each of the disciplines listed; and are
- inclusive of: wages, salaries and other remunerations prescribed by local labour legislation; average allowances for
costs of employment; recruitment; visas/permits; paid leave; travel; accommodation; health and welfare
- exclusive of: overtime working; contractor mark-up for overheads and profit; VAT (Value Added Tax) or similar where applicable.
These rates should not be misinterpreted as contractors’ daywork rates.
106
AECOM
U.A.E. INDICES
The U.A.E. Tender Price Index It is based on new build and The Index is therefore a measure
is AECOM’s assessment of refurbishment projects across a of average price increases
construction tender prices in the variety of construction sectors across differing project types and
U.A.E. It is compiled by AECOM’s and covers all emirates of locations. It should be regarded
MiddleINDEX
PRICE INFLATION East Business Intelligence
AND FORECAST the U.A.E. as a guide only when looking
team based on actual returns at any specific project, as the
of projects. pricing of individual projects will
vary depending on such factors
as their complexity, location,
timescale, etc.
AECOM U.A.E. tender price inflation index and forecast
160
150
140
130
Index: Q4 2009 = 100
120
110
100
90
80
70
Q1 2006
Q1 2011
Q1 2012
Q1 2013
Q1 2014
Q1 2018
Q1 2020
Q1 2007
Q1 2008
Q1 2009
Q1 2010
Q1 2015
Q1 2016
Q1 2017
Q1 2019
Commodities and Materials Index (unweighed) Construction Unit Rates Index

Forecast TPI: Upper Limit of Range Forecast TPI: Lower Limit of Range
Source: AECOM, IMF
UAE tender prices annual percentage change
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019f
-17.08 2.37 -3.54 -5.30 1.12 2.74 2.11 0.62 4.02 0.56 0.04
107
TYPICAL BUILDING
SERVICES STANDARDS
FOR OFFICES
Subject BCO (UK) specification Bahrain UAE Qatar Oman
2014 specification specification specification specification
Net : Gross Ratio 80 - 85% 70 - 80% 75 - 80% 70 - 80% 70 - 80%

(Typical)
Occupancy 1:8 - 1:13/m² 1:10 - 1:14/m² 1:10 - 1:15/m² 1:10 - 1:14/m² 1:10 - 1:15/m²
standards — typical
Occupancy Single sex 1 person to Single sex Single sex Single sex Single sex
standards — toilets 10m² using 60/60 male/ 1 person to 1 person to 1 person to 1 person to
female ratio based on 12m² using 12m² using 12m² using 12m² using
120% ratio. 50/50 male/ 50/50 male/ 50/50 male/ 50/50 male/
female female female female
ratio based ratio based ratio based ratio based
on 100% on 100% on 100% on 100%
population. population. population. population.
Heating and 24oC, +/- 2oC (Summer) 24oC, +/- 2oC 24oC, +/- 2oC 24oC, +/- 2oC 24oC, +/- 2oC
air conditioning 20oC, +/- 2oC (Winter)
internal criteria
Fresh air supplies 12 - 15 L/s per person 8.5 - 10 L/s 8.5 - 10 L/s 8.5 - 10 L/s 8.5 - 10 L/s
per person per person per person per person
Ventilation - WCs none stated 10 Air 10 Air 10 Air 10 Air

(Extract) changes changes changes changes
per hour per hour per hour per hour
Lighting load 10 W/m² 10 W/m² 10 W/m² 10 W/m² 10 W/m²

allowance
Small power load 20-25 W/m² 12 - 25 W/m² 12 - 25 W/m² 12 - 25 W/m² 12 - 25 W/m²

allowance (based
upon 1 workspace
every 10m2)
Acoustics — NR 40 NR 40 NR 40 NR 40 NR 40
open plan
Acoustics — NR 35 NR 35 NR 35 NR 35 NR 35
cellular offices
Lighting - 300 - 500 lux 400 - 500 lux 400 - 500 lux 400 - 500 lux 400 - 500 lux
VDU use
Passenger lifts — 0.8 0.8 0.8 0.8 0.8

capacity
Passenger lifts — < 25 seconds < 30 seconds < 30 seconds < 30 seconds < 30 seconds
waiting time
(up-peak)
108
AECOM
EXCHANGE RATES
Euro UK India China Japan UAE KSA Qatar Oman Bahrain Kuwait Egypt Lebanon Jordan
zone
1 USD = EUR GBP INR RMB JPY AED SAR QAR OMR BHD KWD EGP LBP JOD
H1 2012 0.77 0.63 52.1 6.3 79.7 3.67 3.75 3.64 0.38 0.376 0.278 6.0 1,490 0.707
H2 2012 0.79 0.63 54.6 6.3 79.8 3.67 3.75 3.64 0.38 0.376 0.281 6.1 1,483 0.707
H1 2013 0.76 0.65 55.0 6.2 95.5 3.67 3.75 3.64 0.38 0.376 0.284 6.9 1,486 0.707
H2 2013 0.75 0.63 62.0 6.1 99.6 3.67 3.75 3.64 0.38 0.376 0.283 6.9 1,489 0.707
H1 2014 0.73 0.60 60.8 6.2 102.4 3.67 3.75 3.64 0.38 0.376 0.282 7.0 1,489 0.707
H2 2014 0.78 0.62 61.2 6.2 109.2 3.67 3.75 3.64 0.38 0.376 0.287 7.2 1,492 0.707
H1 2015 0.90 0.66 62.8 6.2 120.3 3.67 3.75 3.64 0.38 0.376 0.299 7.5 1,491 0.707
H2 2015 0.91 0.65 65.4 6.3 121.8 3.67 3.75 3.64 0.38 0.376 0.302 7.8 1,488 0.707
H1 2016 0.90 0.70 67.2 6.5 112.8 3.67 3.75 3.64 0.38 0.376 0.302 8.4 1,508 0.709
H2 2016 0.91 0.78 67.2 6.7 105.9 3.67 3.75 3.64 0.38 0.376 0.303 11.6 1,508 0.709
H1 2017 0.92 0.79 65.7 6.9 112.4 3.67 3.75 3.64 0.38 0.376 0.305 18.0 1,508 0.709
H2 2017 0.85 0.76 64.5 6.6 111.9 3.67 3.75 3.64 0.38 0.376 0.302 17.8 1,508 0.709
H1 2018 0.83 0.73 65.7 6.4 108.7 3.67 3.75 3.64 0.38 0.376 0.301 17.7 1,508 0.709
H2 2018 0.87 0.77 70.7 6.8 111.9 3.67 3.75 3.64 0.38 0.376 0.303 17.9 1,508 0.709
H1 2019 0.80 0.77 70.1 6.8 110.4 3.67 3.75 3.64 0.38 0.376 0.304 17.4 1,508 0.709
Source: Bank of England, www.fxtop.com
109
WEIGHTS
AND MEASURES
Metric measures Imperial measures
and equivalents and equivalents
Length Length
1 millimetre (mm) = 1 mm = 0.0394 in 1 inch (in) = 2.54 cm
1 centimetre (cm) = 10 mm = 0.3937 in 1 foot (ft) = 12 in = 0.3048 m
1 metre (m) = 100 cm = 1.0936 yd 1 yard (yd) = 3 ft = 0.9144 m
1 kilometre (km) = 1000 m = 0.6214 mile 1 mile = 1760 yd = 1.6093 km
1 int. nautical mile = 2025.4 yd = 1.853 km
Area
1 square centimetre (cm2) = 100 mm2 = 0.1550 in2 Area
1 square metre (m2) = 10 000 cm2 = 1.1960 yd2 1 square inch (in2) = 6.4516 cm2
1 hectare (ha) = 10 000 m2 = 2.4711 acres 1 square foot (ft2) = 144 in2 = 0.0929 m2
1 square kilometre (km2) = 100 ha = 0.3861 mile2 1 square yard (yd2) = 9 ft 2 = 0.8361 m2
1 acre = 4840 yd2 = 4046.9 m2
Capacity/volume 1 sq mile (mile2) = 640 acres = 2.59 km2
1 cubic centimetre (cm3) = 1 cm3 = 0.0610 in3
1 cubic decimetre (dm3) = 1000 cm3 = 0.0353 ft3 Capacity/volume
1 cubic metre (m3) = 1000 dm3 = 1.3080 yd3 1 cubic centimetre (cm3) = 1 cm3 = 0.0610 in3
1 litre (l) = 1 dm3 = 1.76 pt 1 cubic decimetre (dm3) = 1000 cm3 = 0.0353 ft3
1 hectolitre (hl) = 100 litre = 21.997 gal 1 cubic metre (m3) = 1000 dm3 = 1.3080 yd3
1 litre (l) = 1 dm3 = 1.76 pt
Mass (weight) 1 hectolitre (hl) = 100 litre = 21.997 gal
1 milligram (mg) = 0.0154 grain
1 gram (g) = 1000 mg = 0.0353 oz Mass (weight)
1 kilogram (kg) = 1000 g = 2.2046 lb 1 ounce (oz) = 437.5 grains = 28.35 g
1 tonne (t) = 1000 kg = 0.9842 ton 1 pound (lb) = 16 oz = 0.4536 kg
1 stone = 14 lb = 6.3503 kg
1 hundredweight (cwt) = 112 lb = 50.802 kg
U.S. measures 1 ton = 20 cwt = 1.016 tonne
and equivalents Temperature conversion

C = 5/9 (F – 32) F = (9/5 C) + 32
U.S. dry measure equivalents
1 pint = 0.9689 U.K. pint = 0.5506 litre
U.S. liquid measure equivalents

1 fluid ounce = 1.0408 U.K. fl oz = 29.574 ml
1 pint (16 fl oz) = 0.8327 U.K. pt = 0.4723 litre
1 gallon = 0.8327 U.K. gal = 3.7854 litre
110
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111
Jebel Ali Sewage Treatment Plant, Dubai, U.A.E.

Image courtesy of Dubai Municipality
112
AECOM
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DIRECTORY
OF OFFICES
113
DIRECTORY
OF OFFICES
United Arab Emirates Kingdom of Saudi Arabia Kingdom of Bahrain
Abu Dhabi Office Al Khobar Office Manama Office
(Regional Head Office) (Saudi Arabia Head Office) United Tower, 32nd Floor
International Tower AECOM Arabia Ltd Building 316, Road 4609
Capital Center 1st Floor, Block 346, Manama / Sea front
PO Box 53 Al Khobar Business Gate PO Box 640, Manama
Abu Dhabi King Faisal Road,
Bandariyah District T: 973 17 588 796
T: 971 2 613 4000 31952 Al Khobar, F: 973 17 581 288
F: 971 2 613 4001 PO Box 1272 bahrain@aecom.com
abudhabi@aecom.com
T: 966 13 849 4400
F: 966 13 849 4411 Qatar
Al Ain Office aal.middleeast@aecom.com
Liwa Center Building Jaidah Square
Level 1 4th Floor, Jaidah Square
PO Box 1419 Jeddah Office Umm Ghuwalina
Al Ain 2nd Floor, Al Tahlia Office Al Matar Street
Mohammed Bin Abdulaziz Street PO Box 6650
T: 971 3 702 6600 PO Box 15362 Doha
F: 971 3 755 4727 Jeddah 21444
alain@aecom.com T: 974 4 407 9000
T: 966 12 213 8500 F: 974 4 437 6782
F: 966 12 213 8595 qatardc.middleeast@aecom.com
saudiarabia.middleeast
Dubai Office @aecom.com
UBora Tower
Levels 43 and 44
PO Box 51028
Business Bay, Dubai Riyadh Office
Tawuniya Towers,
T: 971 4 439 1000 South Tower, Mezzanine Floor,
F: 971 4 439 1001 King Fahad Road
dubai@aecom.com PO Box 58729
Riyadh 11414,
T: 966 11 218 0099

F: 966 11 218 0098
saudiarabia.middleeast
@aecom.com
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114
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Disclaimer
This report has been prepared solely

for information purposes. Whilst every
endeavor has been made to obtain the best
available data from appropriate sources,
AECOM can give no guarantee of accuracy
or completeness. Any views expressed
in this report reflect our judgment at this
date, which are subject to change without
notice. Current forecasts involve risks and
uncertainties that may cause future events
to be different to those suggested by
forward-looking statements. No investment
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As with previous years we continue to

105 106 107 108

Real GDP growth

Source: World Bank Economic Prospects, August 2019

Growth in volume of exports of goods and services

Source: IMF, World Economic Outlook, November 2019

Global composite PMI

Growth in commodity prices

Source: IMF, World Economic Outlook, August 2019

Industrial inputs (includes agricultural raw materials and metals)

Commodity fuel (includes crude oil, natural gas and coal)

Source: IMF, World Economic Outlook, November 2019

Anticipated changes in crude oil supply

Source: OPEC, World Oil Outlook 2040

Changes in oil demand growth

Source: OPEC, World Oil Outlook 2040

Annual oil demand increments by region, 2018-2023

Copper, grade A cathode, LME spot price, CIF European ports

Source: IMF, World Economic Outlook, November 2019

GLOBAL ECONOMIC MARKET

Global EPU index with PPP adjusted GDP weights

Source: Economic Policy Uncertainty

North America GDP from construction ($Bn)

North America GDP from construction ($Bn)

United States, USD

Source: Trading Economics

Across Latin America construction growth expanded at a moderate pace in

For 2019, Mexico held the highest

The economy growth rate will 0.4 5

Latin America GDP from construction ($Bn)

Source: Trading Economics 1. Trading Economics 2. IMF

Despite the threat of Brexit

In 2019 The World Bank reported sub-Saharan Africa overall

The plan would establish Africa’s Angola, USD Ghana, USD

Africa GDP from construction ($Bn)

Source: Trading Economics 1. Trading Economics 2. IMF

Southeast Asia has the fastest Singapore’s construction market

Source: Trading Economics 1. Trading Economics 2. IMF

2019 recorded a loss in

New Zealand, like Australia and

Source: Trading Economics 1. Trading Economics 2. IMF

GCC country forecasts suggests an improved

World, EMDEs and MENA, GDP growth at constant prices

Source: IMF World Economic Outlook, September 2019

Selected MENA countries, GDP growth at constant prices

Source: IMF World Economic Outlook, September 2019

Budget balance for selected MENA countries

Source: Haver Analytics, Emirates NBD Research

GDP annual growth rate (%)

Source: Trading Economics

INSIGHT: SAUDI ARABIA

Saudi Arabia fiscal indicators

Source: Haver Analytics, Emirates NBD Research

Saudi Arabia expenditure 2019e

Source: Emirates NBD Research

Town Square, Dubai, U.A.E.

MENA GROWTH PROSPECTS

Key business-friendly reforms in MENA

Source: The World Bank Doing Business 2020

GLOBAL AND MENA FACTS,