Construction Investment Opportunities in Dubai Post-COVID-19 

With lockdown restrictions slowly easing, investors are ready to go all-in on construction, supported by the government’s PPP Law.

July 2021 , by Alexandra Santiago

Dubai’s construction sector is showing signs of recovery amidst the ongoing COVID-19 outbreak. Lockdown restrictions hampered project growth and potential connections, but excitement is slowly once again being generated among the different sub-sectors, with investors excited to form partnerships as the country regains its footing. 

Public-Private Partnerships in Dubai 
With government budgets still primarily allocated for pandemic relief, upcoming projects are taking a different approach through Law No. 22 of 2015, known more commonly as the PPP Law in Dubai. 

Public Private Partnerships (PPP) provide a legal framework that allows the government to enter into contracts with private sector players with protections for both parties. As Dubai’s overall growth is principally driven by large-scale investments in infrastructure, these partnerships are crucial in taking the city’s expansion to the next level. 

According to Middle East Business Intelligence, the PPP model is gaining traction with more construction-based contracts being awarded. This development started in 2019, when the Department of Finance allocated USD 272 million towards helping attract private sector investors to reduce the burden on government budgets. These partnerships are set to be key growth drivers for the economy, not only in terms of generating potential jobs and revenue, but in helping create more efficient government services and reducing issues with bureaucracy.  

A Burgeoning Real Estate Boom 
One of the biggest opportunities for the construction industry’s growth comes through residential development, specifically in the luxury segment. Earlier in July, a Dubai-based developer announced its plans to construct a luxury skyscraper worth USD 272 billion within the city, helping revive high-end construction.  

This development is just one of the many new projects aimed at increasing home ownership across the city, with many citizens ready to invest in the luxury projects being undertaken this 2021. Arabian Business reports that a total of 586 villas and 3,450 apartments were being brokered within Q1 of 2021, with a value of AED 11.6 billion—an increase of 25% in value transactions for the Dubai luxury real estate market.  

These values are projected to rise even more as the city opens itself up to large-scale events, like the Expo 2020 set to begin in October 2021. Potential investors—both foreign and local—have the unique opportunity to strike while the proverbial iron is still hot, so to speak, as grand plans for home and hospitality development unfold within the city.  

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