DUBAI, (Reuters) – The amount of construction projects cancelled and delayed in the United Arab Emirates rose to $170 billion in August, Citigroup said in a report, signalling the battered sector in the Gulf state is still away from a recovery.
UAE accounts for 56 percent of the total cancelled and delayed projects for the main regional markets, the MENA construction projects tracker report by Citi showed. The cancellations are an increase of 13 percent since July.
“Unsurprisingly cancellations in the UAE relate predominantly to real estate,” the report said.
UAE’s property boom ended in 2008, with home prices in the Dubai emirate plunging by about 60 percent, forcing many developers to abandon projects.
Dubai developer Nakheel , which overstretched itself by building islands in the shape of palms and other ambitious projects, wrote off up to 78.6 billion dirhams ($21.4 billion) of its real estate assets due to a property crisis, according to a bond prospectus.
Meanwhile, projects cancelled and on hold across main MENA markets dropped slightly to $1.69 trillion in August from $1.7 trillion in July.
In other markets, Saudi Arabia added $81 billion of preliminary projects to its pipeline since July, said the report, highlighting the growth potential in the market.
Kuwait and Qatar also have projects worth $20 billion and $2 billion respectively that are in preliminary stages of construction. In contrast, UAE showed a $12 billion decline in preliminary projects to $118 billion.