UAE Developers Bring Construction In-House Amid Property Boom

In response to a booming property market, prominent UAE developers like Emaar Properties are establishing in-house contracting firms to gain greater control over construction processes. This shift aims for increased profit margins and project consistency, though it poses risks of resource misallocation during market downturns.

In a bold move to capitalize on the booming property landscape, UAE developers are launching in-house contracting firms. Previously reliant on third-party contractors, giants such as Emaar Properties are now overseeing their own construction projects. This strategic decision aims to enhance control over timelines, costs, and quality standards, while boosting profit margins.

Emaar, known for iconic projects like the Burj Khalifa, confirmed the establishment of its in-house firm Rukn Mirage. The firm joins others like Samana, Ellington, and Azizi in shifting towards self-reliance. This trend coincides with Dubai's real estate surge, where property prices have soared by 70% over four years, influencing both workforce dynamics and market completion rates.

While developers enjoy benefits such as project consistency, industry experts warn of potential risks. The diversion of focus from core activities may lead to inefficiencies, particularly if market conditions shift. Furthermore, the sector's reliance on escrow-released funds underscores the need for punctual project completion to ensure financial liquidity and expansion opportunities.

(With inputs from agencies.)