UAE construction shifts to negotiated contracts

  • Date: 07-May-2024
  • Source: MEED
  • Sector:Real Estate
  • Country:UAE
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UAE construction shifts to negotiated contracts



UK-based consultancy Turner & Townsend says that 25% of survey respondents indicated negotiated procurement routes as their most common experience

There has been a notable shift towards construction contracts being negotiated in the UAE, says UK consultancy Turner & Townsend in its latest UAE market intelligence report.According to Turner & Townsend’s market survey, 25% of respondents indicated negotiated procurement routes as their most common experience. Clients, particularly on large-scale complex projects, are also seeking early contractor engagement, which, in some instances, is formalised through the use of a pre-construction services agreement (PCSA).The trend towards more negotiated contracts reflects the high volumes of new work coming onto the market, a finite pool of contractors, and regional competition for resources. “With the combination of a more regulated real estate market and incentives for longer term investment driving population growth, it’s difficult to see a significant tail off in market conditions in the short term. As such, we expect tendering conditions to remain similar for the next 1-2 years,” said David Griffiths, director, UAE Real Estate Lead, Turner & Townsend.“The market may also experience a continued shortfall of suitable contractors, due to an exodus of major global contractors and the lures of the project